Exhibit 4.7
DYNEGY INC.
DEFERRED COMPENSATION PLAN TRUST AGREEMENT
TABLE OF CONTENTS
ARTICLE I : GENERAL TRUST PROVISIONS I-1
ARTICLE II : GENERAL DUTIES OF THE PARTIES II-1
ARTICLE III : INVESTMENT, ADMINISTRATION AND
DISBURSEMENT OF TRUST FUND III-1
ARTICLE IV : SETTLEMENT OF ACCOUNTS IV-1
ARTICLE V : TAXES, EXPENSES AND COMPENSATION
OF TRUSTEE V-1
ARTICLE VI : FOR PROTECTION OF TRUSTEE VI-1
ARTICLE VII : INDEMNITY VII-1
ARTICLE VIII : RESIGNATION AND REMOVAL OF TRUSTEE VIII-1
ARTICLE IX : DURATION AND TERMINATION OF
TRUST AND AMENDMENT IX-1
ARTICLE X : CLAIMS OF COMPANY'S CREDITORS X-1
ARTICLE XI : ADOPTING ENTITIES XI-1
ARTICLE XII : MISCELLANEOUS XII-1
(i)
DYNEGY INC.
DEFERRED COMPENSATION PLAN TRUST AGREEMENT
THIS AGREEMENT AND DECLARATION OF TRUST, made this 28th day of December,
2001, by and between (i) DYNEGY INC. (hereinafter referred to as the
"Company") and (ii) VANGUARD FIDUCIARY TRUST COMPANY (hereinafter referred to
as the "Trustee").
WHEREAS, the Company has established the DYNEGY INC. DEFERRED
COMPENSATION PLAN (hereinafter referred to as the "Plan") for the benefit of
certain individuals who are eligible for benefits under the terms of the Plan
(such individuals being referred to herein as the "Members"), which Plan
provides for the payment of certain deferred compensation benefits (the
"Benefits") to the Members and, in the event of the death of a Member, the
beneficiaries of the respective Members entitled to any payments under the
terms of the Plan ("Beneficiaries"); and
WHEREAS, the Plan contemplates that the Company will pay the entire cost
of the Benefits from its general assets; and
WHEREAS, the Company desires to adopt the DYNEGY INC.
DEFERRED
COMPENSATION PLAN TRUST AGREEMENT (the "Trust Agreement") establishing a
trust (the "Trust") to aid the Company in meeting its obligations under the
Plan; and
WHEREAS, the Trust is intended to be a "grantor trust" with the corpus
and income of the Trust treated as assets and income of the Company for
federal income tax purposes; and
WHEREAS, the Company intends that the assets of the Trust shall at all
times be subject to the claims of general creditors of the Company as
provided in Article X; and
WHEREAS, the Company intends that the existence of the Trust shall not
alter the characterization of the Plan as "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
shall not be construed to provide income to any Member prior to actual
payment of Benefits under the Plan; and
WHEREAS, other adopting entities have adopted the Plan and other adopting
entities may adopt the Plan in the future, and the Company desires to permit
such entities to adopt separate sub-trusts hereunder that are substantially
similar to the Trust; and
WHEREAS, under the Trust, the Trustee covenants that it will hold all
property which it may receive hereunder, IN TRUST, for the uses and purposes
and upon the terms and conditions hereinafter stated;
NOW, THEREFORE, the parties hereto establish the Trust, effective January
1, 2002, and agree, as follows:
(ii)
ARTICLE I
GENERAL TRUST PROVISIONS
1.1 ESTABLISHMENT OF TRUST. The Company hereby adopts this Trust
Agreement. The Trust shall consist of such sums of money and, with prior
written notice to the Trustee, insurance policies and other property
acceptable to the Trustee as from time to time shall be paid or delivered to
the Trustee by the Company. All such money and other property, all
investments and reinvestments made therewith or proceeds thereof and all
earnings and profits thereon, less all payments and charges as authorized
herein, shall constitute the "Trust Fund." The Trust Fund shall at all times
be subject to the claims of general creditors of the Company as provided in
Article X. No Member or Beneficiary shall have any preferred claim to, or
any beneficial ownership interest in, any assets of the Trust Fund prior to
the time such assets are paid to such Member or Beneficiary as Benefits.
1.2 SEPARATE SUB-TRUSTS. Contrary provisions of the Trust
notwithstanding, except as provided in Article XI, the provisions of the
Trust shall apply separately and equally to the Company and to each adopting
entity that has entered into this Trust Agreement pursuant to Article XI.
The Company and each such adopting entity shall bear the cost of providing
Benefits for its own Members and their Beneficiaries, and the portion of the
Trust Fund attributable to the contributions of the Company and each such
adopting entity shall be available to provide benefits only to the Company's
or such adopting entity's (as applicable) Members and their Beneficiaries or
to satisfy claims of the Company's or such adopting entity's (as applicable)
Bankruptcy Creditors in the event the Company or such adopting entity (as
applicable) becomes Insolvent (as such terms are defined in Section 10.1).
Notwithstanding the foregoing or any provision in this Trust Agreement to the
contrary, to the extent required by Internal Revenue Service Notice 2000-56,
shares of common stock of the Company that are contributed by the Company to
the Trust for the benefit of employees of another adopting entity that is a
subsidiary of the Company shall be subject to the claims of the creditors of
both the Company and such subsidiary, and the remaining shares contributed by
the Company shall revert to the Company upon termination of the Trust.
1.3 TRUST IRREVOCABLE. The Trust shall be irrevocable and shall be held
for the exclusive purpose of providing benefits under the Plan to Members and
their Beneficiaries and defraying expenses of the Trust in accordance with
the provisions of this Trust Agreement. Except as provided in Section 3.6(c)
and Articles IX and X hereof, no part of the income or corpus of the Trust
Fund shall be recoverable by or for the Company.
1.4 NON-ALIENATION. No right or interest to receive benefits from the
Trust may be assigned, sold, anticipated, alienated or otherwise transferred
by any Member or Beneficiary.
1.5 ACCEPTANCE BY TRUSTEE. The Trustee accepts the Trust established
under this Trust Agreement on the terms and subject to the provisions set
forth herein, and it agrees to discharge and perform fully and faithfully all
of the duties and obligations imposed upon it under this Trust Agreement.
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ARTICLE II
GENERAL DUTIES OF THE PARTIES
2.1 GENERAL DUTIES OF THE COMPANY AND THE TRUSTEE.
(a) The Company has provided or will provide the Trustee with a copy
of the Plan and shall provide the Trustee with a copy of any amendment to the
Plan promptly upon its adoption. The Plan, as of the date of execution of
this Trust Agreement, is hereby incorporated by reference into and shall form
a part of this Trust Agreement as fully as if set forth herein verbatim. Any
amendment to the Plan shall also be incorporated by reference into and form a
part of this Trust Agreement, effective as of the effective date of such
amendment. As soon as administratively practicable after December31, 2001,
the Company shall (or shall cause the Recordkeeper, as such term is hereafter
defined, to) prepare and deliver to the Trustee a schedule (the "Benefit
Schedule," as amended from time to time as provided herein) setting forth as
of such date (1) the name and mailing address of each Member entitled to
receive Benefits, (2) the Beneficiaries, if any, designated by each Member,
(3) the aggregate balance(s) of and nonforfeitable interest ("Vested
Interest") in each Member's Account(s) (as such term is defined in the Plan)
and subaccounts thereof, and (4) each Member's time of payment and form of
benefit payment elections made pursuant to the Plan with respect to each Plan
Year for which the Member elects to defer Compensation under the Plan and/or
the Employer credits the Member's Employer Account with an Employer Deferral
(as such terms are defined under the Plan). The Company shall be responsible
for notifying the Trustee of any changes in the information set forth on the
Benefit Schedule, including, but not limited to, the addition of new Members
and a change in the mailing address of a Member. For purposes of this Trust
Agreement, the term "Recordkeeper" shall mean the recordkeeper engaged from
time to time by the Company with respect to the Plan to assist the Company in
connection with the administration of the Plan.
(b) Subject to the provisions of Section 2.1(c), beginning with
calendar year 2003, (1) prior to the occurrence of a Change in Control (as
such term is defined in Section12.4), the Company shall (or shall cause the
Recordkeeper to) prepare and deliver to the Trustee by March31 of each year a
completely updated Benefit Schedule as of the preceding December31, or (2)
from and after the occurrence of a Change in Control, the Trustee shall keep
the Benefit Schedule accurate and current, including but not limited to,
preparing by March 31 of each year a completely updated Benefit Schedule as
of the preceding December 31 with such assistance from the Company, the
Recordkeeper, and third parties as may be necessary in order to permit
distributions from the Trust Fund to be made in accordance with the
provisions of Section 3.6. The Company shall keep accurate books and records
with respect to the eligibility of individuals to participate in the Plan and
the Benefits payable under the Plan, and the Company shall provide such
information to the Trustee and any third party referred to in the immediately
preceding sentence and shall also provide access to such books and records at
such time or times as the Trustee shall reasonably request.
(c) If, at any time, the Company fails or refuses to give the
Trustee an updated Benefit Schedule or, if applicable, data or access to such
books and records in accordance with Section 2.1(b), the Trustee shall
deliver a written request to the Company to provide such Benefit
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Schedule or, if applicable, access to such books and records of the Company
and to provide such data as required in accordance with Section 2.1(b) for
the Trustee to keep the Benefit Schedule accurate and current. If the
Company fails or refuses to comply with the Trustee's written request
pursuant to the preceding sentence prior to the expiration of thirty days
from the date of delivery thereof by the Trustee, the Trustee shall, after
ten days written notice to the Company, immediately pay to each Member an
amount equal to the aggregate balances in such Member's Accounts ("Account
Balances") as set forth on the most recent Benefit Schedule, reduced by any
taxes to be withheld pursuant to Section3.6. Such payment shall be made in
accordance with the provisions of Section 3.6. For this purpose, the Company
shall be deemed to have complied with the Trustee's written request if, in
the Trustee's judgment, it shall have substantially complied at the end of
the thirty-day period and is endeavoring in good faith to complete compliance
without delay.
(d) From and after the occurrence of a Change in Control, the
Company shall notify each Member and each Beneficiary (in the case of a then
deceased Member) in writing of any changes in the Benefit Schedule with
respect to such Member or Beneficiary, and, to the extent that such
notification is not provided by the Company, the Trustee shall provide such
notification, and the Trustee shall notify all Members and such Beneficiaries
of any failure of the Company to provide information required in this Section
2.1.
(e) It is intended that Benefits payable to Members shall be
determined under the provisions of the Plan and shall be calculated by the
Recordkeeper under the provisions of the Plan as of the date of payment.
Payment of Benefits shall be based upon the amounts set forth on the Benefit
Schedule only under the circumstances set forth in Section 2.1(c). If the
actual Benefits payable to a Member under the provisions of the Plan exceed
the amount set forth on the Benefit Schedule which are paid pursuant to
Section 2.1(c), the Company shall be liable for payment of the remaining
portion of such Benefits.
(f) Trust provisions to the contrary notwithstanding, the Company
shall have the right at any time, and from time to time, in its sole
discretion and upon prior written notice to the Trustee, to substitute
marketable securities of equal fair market value for any asset held by the
Trust. This right is exercisable by the Company in a nonfiduciary capacity
without the approval or consent of any person in a fiduciary capacity.
(g) As soon as administratively practicable after each date upon
which an amount is credited to a Member's Deferral Plan Year Subaccount or
Employer Plan Year Subaccount under the Plan pursuant to Article III of the
Plan, the Company shall contribute an equivalent amount to the Trust.
2.2 ADDITIONAL GENERAL DUTIES OF TRUSTEE. The Trustee shall manage,
invest and reinvest the Trust Fund as the Trustee may determine in the
exercise of its fiduciary duties hereunder, consistent with the provisions of
ArticleIII. The Trustee shall collect the income on the Trust Fund for the
benefit of the Trust, and make distributions therefrom, all as hereinafter
provided.
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ARTICLE III
INVESTMENT, ADMINISTRATION AND DISBURSEMENT OF TRUST FUND
3.1 INVESTMENT OF TRUST FUND. The following provisions shall apply with
respect to the investment of the Trust Funds:
(a) To the extent that the Trustee is directed by the Dynegy Inc.
Benefit Plans Committee (the "Committee") prior to the occurrence of a
Change in Control, the Trustee may invest in securities (including stock
or rights to acquire stock) or obligations issued by the Company;
(b) At any time prior to the occurrence of a Change in Control, the
Trust shall be invested by the Trustee among regulated investment companies
which have been previously designated as investment fund alternatives by
the Committee and a fund consisting of securities or obligations issued by
the Company to the extent provided in paragraph (a) above (the "Investment
Funds"). The Committee shall notify the Trustee in writing of the selection
of the Investment Funds and any changes thereto. The Trustee shall invest
the Trust in accordance with the written directions of the Committee or, to
the extent that such directions are not received for all or a portion of the
Trust, in the Trustee's discretion among any of the Investment Funds. The
Committee may, in its discretion, direct the Trustee to follow the deemed
investment directions of each Member or Beneficiary of a deceased Member,
whether written or telephonic, with respect to a portion of the Trust Fund
assets equal in value to the Account Balances maintained under the Plan on
behalf of such individual, within parameters established by, and as agent
for, the Committee. The Trustee shall have no liability or responsibility
for acting without question on the direction of the Committee, or for the
exercise of investment discretion in the absence of direction from the
Committee, unless such actions are contrary to the express provisions of
this Trust Agreement. The Company shall indemnify the Trustee for liability
to any party resulting from the Trustee acting without question on the
direction of the Committee, and for liability to any party resulting from
the exercise of investment discretion in the absence of investment direction
from the Committee as to all or a portion of the Trust, unless such actions
are contrary to the express provisions of this Trust Agreement or are the
result of the Trustee's negligence or willful misconduct. All interest,
dividends, and other income received with respect to, and any proceeds
received from the sale or other disposition of securities or other property
held in an Investment Fund shall be credited to and reinvested in such
Investment Fund. All expenses of the Trust Fund which are allocable to a
particular Investment Fund shall be so allocated and charged. The Committee
may direct the Trustee to eliminate an Investment Fund or Funds, and the
Trustee shall thereupon dispose of the assets of such Investment Fund and
reinvest the proceeds thereof in accordance with the directions of the
Committee; and
(c) From and after the occurrence of a Change in Control, the
Trustee shall have, with respect to the Trust Fund, power in its discretion
to invest and reinvest such assets in (i) common and preferred stocks,
bonds, notes (whether secured or unsecured) and debentures (including
convertible stocks and securities but not including any stock,
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debt instruments, or other securities of the Company (except as provided
in clause (v) below), the Trustee or their affiliates) which are readily
marketable and listed on a United States national securities exchange or
the NASDAQ national market, (ii) interest-bearing deposit accounts or
certificates of deposit maturing within one year after acquisition
thereof, entered into or issued by a United States national or state bank
or trust company having capital, surplus and undivided profits, at the
holding company level, of at least $750 million, (iii) direct obligations
of, and obligations fully guaranteed by, the United States of America or
any agency of the United States of America which is backed by the full
faith and credit of the United States of America (so long as such
obligations shall mature within one year after acquisition thereof), (iv)
any common, collective or commingled fund, including a fund maintained by
the Trustee, established and maintained primarily for the purpose of
investing and reinvesting in assets of the type described in (i), (ii) or
(iii) above, and (v) the Investment Funds most recently designated by the
Committee prior to the occurrence of the Change in Control (or any
regulated investment company selected by the Trustee in its sole
discretion to replace any such Investment Fund). Further,
notwithstanding the provisions of the preceding sentence, after the
occurrence of a Change in Control, the Trustee shall have the power in
its discretion to retain, maintain, continue, sell, or take any other
actions relative to any assets then held in the Trust Fund (including,
without limitation, to take actions in accordance with deemed investment
directions obtained directly from a Member or Beneficiary of a deceased
Member with respect to a portion of the Trust Fund assets equal in value
to the Account Balances maintained under the Plan on behalf of such
individual).
3.2 VALUATION OF TRUST FUND. As soon as practicable after the last day
of each calendar year and as of such other dates as may be specified by the
Company or the Committee, the Trustee shall report to the Company and the
Committee the assets held in the Trust Fund as of such day and shall
determine and include in such report the fair market value as of such day of
each such asset. In determining such fair market values, the Trustee shall
use such market quotations and other information as are available to it and
may in its discretion be appropriate. The report of any such valuation shall
not constitute a representation by the Trustee that the amounts reported as
fair market values would actually be realized upon the liquidation of the
Trust Fund. The Trustee shall not be accountable to the Company or to any
other person on the basis of any such valuation, but its accountability shall
be in accordance with the provisions of Article IV hereof.
3.3 ADDITIONAL INVESTMENT POWERS OF TRUSTEE. Subject to the provisions
of Sections 3.1, 3.6 and 9.2 hereof, the Trustee shall have, with respect to
the Trust Fund, the power in its discretion:
(a) To retain any property at any time received by it;
(b) To sell, exchange, convey, transfer or dispose of, and to grant
options for the purchase or exchange with respect to, any property at any
time held by it;
III-2
(c) To register and carry any securities or any other property in
the name of the Trustee, or in the name of the nominee of the Trustee (or
to hold any such property unregistered) without increasing or decreasing
the fiduciary liability of the Trustee, and to exercise any option, right
or privilege to convert any convertible securities, including shares or
fractional shares of the Trustee so long as the conversion privilege is
offered pro rata to all shareholders;
(d) To cause any securities to be held in book-entry or in bearer form;
(e) To hold property for investment that may be unproductive of income;
and
(f) To hold uninvested at any time, without liability for interest
thereon for a reasonable period of time (not to exceed one business day),
any money received by the Trustee or raised by the Trustee from the sale of
investments or otherwise until the same can be reinvested or disbursed.
3.4 ADMINISTRATIVE POWERS OF TRUSTEE. The Trustee shall have the power
in its discretion:
(a) To exercise all voting and other rights with respect to the
shares of stock held in the Trust Fund and to grant proxies, discretionary
or otherwise; provided, however, that, prior to the occurrence of a Change
in Control, (1) the Committee shall direct the Trustee with respect to all
such matters other than with respect to stock issued by the Company or its
affiliates, and (2) the Trustee shall exercise all voting and other rights
with respect to stock issued by the Company or its affiliates;
(b) To cause any shares of stock to be registered and held in the
name of one or more of its nominees, or one or more nominees of any system
for the central handling of securities, without increase or decrease of
liability;
(c) To collect and receive any and all money and other property due
to the Trust Fund and to give full discharge therefor;
(d) Subject to the provisions of Section 3.6 hereof, to settle,
compromise or submit to arbitration any claims, debts or damages due or
owing to or from the Trustee, to commence or defend suits or legal
proceedings to protect any interest of the Trust, and to represent the Trust
in all suits or legal proceedings in any court or before any other body or
tribunal;
(e) To organize under the laws of any state a corporation or limited
liability company for the purpose of acquiring and holding title to any
property which it is authorized to acquire under this Trust Agreement and
to exercise with respect thereto any or all of the powers set forth in this
Trust Agreement;
(f) To determine how all receipts and disbursements shall be
credited, charged or apportioned as between income and principal;
III-3
(g) To determine the amount and time of Benefit payments in
accordance with Section 3.6;
(h) To employ and compensate such attorneys, counsel, brokers or
other agents or employees and to delegate to them such of the duties,
rights and powers of the Trustee as may be deemed advisable in handling and
administering the Trust; and
(i) Generally to do all acts, whether or not expressly authorized,
which the Trustee may deem necessary or desirable for the protection of the
Trust Fund.
3.5 DEALINGS WITH TRUSTEE. Persons dealing with the Trustee shall be
under no obligation to see to the proper application of any money paid or
property delivered to the Trustee or to inquire into the Trustee's authority
as to any transaction.
3.6 DISTRIBUTIONS FROM TRUST FUND.
(a) Except as set forth in Section 3.6(c), Section 9.2 and ArticleX
hereof, distributions from the Trust Fund shall be made by the Trustee to the
Members and Beneficiaries at the times and in the amounts determined in
accordance with the provisions of the Plan and, to the maximum extent
permitted by applicable law, the Trustee shall be fully protected in so
doing. Any amounts so paid shall be reduced by the amount of any federal,
state, or local income or other taxes that may be required by law to be
withheld or paid by the Trustee or the Company. To the extent required by
applicable law, the Trustee shall withhold, pay, and report such amounts to
the appropriate governmental authorities. To the extent the withholding and
reporting obligations belong to the Company and not to the Trustee, the
Trustee shall pay to the Company the appropriate withholding amount. The
Company, the Committee, the Members, and the Beneficiaries shall provide the
Trustee with all of the information necessary for the Trustee to determine
the amount of such taxes required to be withheld or paid by the Trustee or
the Company, and the Trustee shall be fully protected in relying upon such
information. Notwithstanding any provision of this Trust Agreement to the
contrary, the Company shall be obligated to pay the Benefits to the extent
that the Trust Fund is not sufficient to pay any Benefit when due. In the
event Benefits are due to more than one Member or Beneficiary on the same
date and the Trust Fund is not sufficient to pay all such Benefits, the Trust
Fund shall be applied pro rata among such Members and Beneficiaries on the
basis of the Benefits due to be paid such individuals on such date. Nothing
in this Trust Agreement shall relieve the Company of its liabilities to pay
Benefits except to the extent such liabilities are met by application of
Trust Fund assets.
(b) Prior to the occurrence of a Change in Control, the Committee
shall (or shall cause the Recordkeeper to) direct the Trustee in writing as
to the time and amount of Benefits to be distributed to the Members and
Beneficiaries. From and after the occurrence of a Change in Control, a
Member or Beneficiary who believes that he or she is entitled to Benefits
pursuant to the terms of the Plan may apply in writing directly to the
Trustee for payment of such Benefits. Such application shall advise the
Trustee of the circumstances which entitle such Member or Beneficiary to
payment of such Benefits. The Trustee shall promptly forward such
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application to the Committee, and the Trustee shall pay such Benefits to the
Member or Beneficiary 30 days after the Trustee has forwarded such
application to the Committee, unless, prior to the expiration of such 30-day
period, the Committee notifies the Trustee in writing that (1) such Benefits
have already been paid in full or (2) such Member's or Beneficiary's
entitlement to such Benefits is disputed by the Committee. If the Committee
provides the Trustee with the notice described in clause (1) or (2) of the
preceding sentence, then the Trustee shall reach its own independent
determination as to the Member's or Beneficiary's entitlement to Benefits.
If the Trustee so desires, it may, in its sole discretion, make such
additional inquiries and/or take such additional measures as it deems
necessary in order to enable it to determine whether Benefits are due and
payable, including, but not limited to, interviewing appropriate persons,
requesting affidavits, soliciting oral or written testimony under oath, or
holding a hearing or other proceeding. As promptly as possible after the
occurrence of a Change in Control, the Trustee shall determine whether
Benefits are payable.
(c) At any time and from time to time, the Committee may direct the
Trustee in writing to distribute to the Company cash held by the Trustee as
part of the Trust Fund in an amount equal to the Benefits accrued under the
Plan that have been forfeited under the terms of the Plan. As soon as
practicable after receipt of such a direction and, if such direction is
received by the Trustee after the occurrence of a Change in Control, the
Trustee's independent determination that such benefits have, in fact, been
forfeited in accordance with the terms of the Plan, the Trustee shall
distribute such amount to the Company.
(d) The Trustee may engage its own outside counsel or other experts
to assist it in making any determination under Section 3.6(a), (b), (c), or
(f) hereof. The cost of such outside counsel or other expert assistance, and
any other costs reasonably incurred by the Trustee in making any such
determination, shall be borne by the Company. From and after a Change in
Control, if the Company fails to pay any such costs when due or requested by
the Trustee, the Trustee may use the assets of the Trust Fund to pay them as
provided in Section 5.2.
(e) The Trustee shall not itself commence any legal action, whether
in the nature of an interpleader action, request for declaratory judgment or
otherwise, requesting a court to make a determination under Section 3.6(a),
(b), (c), or (f) hereof in the Trustee's stead without first using its best
efforts to make such determination; provided that notice thereof is
contemporaneously given by the Trustee to the Company and the Committee.
(f) Notwithstanding any other provision of this Trust Agreement, if
any amounts held in the Trust are found in a "determination" (within the
meaning of Section 1313(a) of the Internal Revenue Code of 1986, as amended
(the "Code")) to have been includible in gross income of a Member or
Beneficiary prior to payment of such amounts from the Trust, the Trustee
shall, as soon as practicable after receiving notice thereof, pay such
amounts to such Member or Beneficiary, as applicable, (but not in excess of
such Member's or Beneficiary's Account Balances at the time of such payment).
For purposes of this Section 3.6, the Trustee shall be entitled to rely on
an affidavit by a Member or Beneficiary, as applicable, and a copy of the
determination to the effect that a determination described in the preceding
sentence has occurred.
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ARTICLE IV
SETTLEMENT OF ACCOUNTS
The Trustee shall keep full accounts of all of its receipts and
disbursements. The Trustee's books and records with respect to the Trust
Fund shall be open to inspection by the Company, the Committee, or their
representatives at all times during business hours of the Trustee. The
Trustee shall use its best efforts to prepare, sign and mail to the Company
and the Committee within sixty days (but in no event more than ninety days)
after December31 of each year (or such other date as may be agreed to by the
Company and the Trustee), or any termination of the duties of the Trustee, an
account of its acts and transactions as Trustee hereunder. If, within one
year after the mailing of the account or any amended account, the Company and
the Committee have not filed with the Trustee notice of any objection to any
act or transaction of the Trustee, the account or amended account shall
become an account stated. If any objection has been filed, and if the
objecting party is satisfied that it should be withdrawn or if the account is
adjusted to the objecting party's satisfaction, the objecting party shall in
writing signify to the Trustee its approval of the account and it shall
become an account stated. When an account becomes an account stated, such
account shall be finally settled absent manifest error, and the Trustee shall
be completely discharged and released, as if such account had been settled
and allowed by a judgment or decree of a court of competent jurisdiction in
an action or proceeding in which the Trustee, the Company and the Committee
were parties. The Trustee, the Company or the Committee shall have the right
to apply at any time to a court of competent jurisdiction for judicial
settlement of any account of the Trustee not previously settled as
hereinabove provided. In any such action or proceeding it shall be necessary
to join as parties the Trustee, the Company, and the Committee and any
judgment or decree entered therein shall be conclusive upon all such parties.
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ARTICLE V
TAXES, EXPENSES AND COMPENSATION OF TRUSTEE
5.1 TAXES. The Company agrees that all income, deductions, and credits
of the Trust Fund belong to it as owner for income tax purposes and will to
the extent necessary be included on the Company's income tax returns. The
Company shall from time to time pay taxes (references in this Trust Agreement
to the payment of taxes shall include interest and applicable penalties) of
any and all kinds whatsoever which at any time are lawfully levied or
assessed upon or become payable in respect of the Trust Fund, the income or
any property forming a part thereof, or any security transaction pertaining
thereto. To the extent that any taxes levied or assessed upon the Trust Fund
are not paid by the Company or contested by the Company pursuant to the last
sentence of this Section 5.1, the Trustee shall pay such taxes out of the
Trust Fund and the Company shall upon demand by the Trustee deposit into the
Trust Fund an amount equal to the amount paid from the Trust Fund to satisfy
such tax liability. If requested by the Company, the Trustee shall, at
Company expense, contest the validity of such taxes in any manner deemed
appropriate by the Company or its counsel. Alternatively, the Company may
itself contest the validity of any such taxes, but any such contest shall not
affect the Company's obligation to reimburse the Trust Fund for taxes paid
from the Trust Fund.
5.2 EXPENSES AND COMPENSATION. The Trustee shall be paid compensation
by the Company as the Company and the Trustee may from time to time agree.
The Trustee shall be reimbursed by the Company for its reasonable expenses of
management and administration of the Trust, including reasonable compensation
of counsel and any agent engaged by the Trustee to assist it in such
management and administration. From and after a Change in Control, in the
event that the Company shall fail or refuse to pay such compensation or make
such reimbursements within sixty days of demand, the Trustee may satisfy such
obligations out of the assets of the Trust Fund; in that event, the Company
shall immediately upon demand by the Trustee deposit into the Trust Fund a
sum equal to the amount paid by the Trust Fund for such fees and expenses.
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ARTICLE VI
FOR PROTECTION OF TRUSTEE
6.1 COMMUNICATIONS WITH THE COMPANY, THE COMMITTEE AND THE MEMBERS.
(a) The Company shall certify to the Trustee the name or names of
any person or persons authorized to act for the Company and for the
Committee. Such certification shall be signed by an officer of the Company.
Until the Company notifies the Trustee, in a similarly signed notice, that
any such person is no longer authorized to act for the Company or for the
Committee, as applicable, the Trustee may continue to fully rely upon the
authority of such person.
(b) The Trustee may fully rely upon any certificate, notice or
direction of the Company or the Committee which the Trustee reasonably
believes to have been signed by a duly authorized officer or agent of the
Company or the Committee, as applicable.
(c) Communications to the Trustee shall be sent in writing to the
Trustee at 000 Xxxxxxxx Xxxxxxxxx, X00, Xxxxxxx, Xxxxxxxxxxxx 00000,
Attention: ERISA Legal, or to such other address as the Trustee may specify.
No communication shall be binding upon the Trust Fund or the Trustee until it
is received by the Trustee and unless it is in writing and signed by an
authorized person.
(d) Communications to the Company shall be sent in writing to the
Company at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
Attention:General Counsel, or to such other address as the Company may
specify in writing to the Trustee. Communications to the Committee shall be
sent in writing to Dynegy Inc. Benefit Plans Committee, 0000 Xxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, Attention:Vice President - Human
Resources. Communications to a Member or Beneficiary shall be sent in
writing to the address of such person as stated on the Benefit Schedule, or
to such other address as such person may specify in writing to the Trustee.
No communication shall be binding upon the Company, the Committee, or a
Member or Beneficiary until it is received by such person.
6.2 ADVICE OF COUNSEL. The Trustee may consult with any legal counsel
approved in advance by the Company (which approval shall not be unreasonably
withheld) with respect to the construction of this Trust Agreement, its
duties hereunder, or any act which it proposes to take or omit, and shall not
be liable for any action taken or omitted in good faith pursuant to such
advice. Expenses of such counsel shall be deemed to be expenses of management
and administration of the Trust within the meaning of Section 5.2 hereof.
6.3 FIDUCIARY RESPONSIBILITY.
(a) The Trustee shall discharge its duties under this Trust
Agreement in effectuating the Plan in a manner consistent with the objectives
of this Trust Agreement and the Plan. The Trustee shall not be liable for
any loss sustained by the Trust Fund by reason of the
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purchase, retention, sale or exchange of any investment in good faith and in
accordance with the provisions of this Trust Agreement. The Trustee shall
have no responsibility or liability for any failure of the Company to make
contributions to the Trust Fund or for any insufficiency of assets in the
Trust Fund to pay Benefits when due. The Trustee shall not be liable
hereunder for any act taken or omitted to be taken in good faith, except for
its own negligence or misconduct.
(b) No bond shall be required of the Trustee unless otherwise
required by law.
(c) The Trustee's duties and obligations shall be limited to those
expressly imposed upon it by this Trust Agreement.
(d) The Company at any time may employ as agent (to perform any act,
keep any records or accounts, or make any computations required of the
Company or the Committee by this Trust Agreement or the Plan) the individual,
corporation or association serving as Trustee hereunder. Nothing done by said
individual, corporation or association as such agent shall affect its
responsibilities or liability as Trustee hereunder.
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ARTICLE VII
INDEMNITY
Unless resulting from the Trustee's negligence, willful misconduct, lack
of good faith, or breach of its duties or obligations under this Agreement or
applicable law, the Company shall indemnify and save harmless the Trustee
from, against, for and in respect of any and all damages, losses,
obligations, liabilities, liens, deficiencies, costs and expenses, including
without limitation, reasonable attorney's fees incident to any suit, action,
investigation, claim or proceedings suffered, sustained, incurred or required
to be paid by the Trustee in connection with the Plan or this Agreement. The
Trustee shall indemnify and save harmless the Company, the Plan, and the
Committee from, against, for and in respect of any and all damages, losses,
obligations, liabilities, liens, deficiencies, costs and expenses, including
without limitation, reasonable attorneys' fees, incident to any suit, action,
investigation, claim or proceedings suffered, sustained, or incurred as a
result of the Trustee's negligence, willful misconduct, lack of good faith,
or breach of its duties or obligations under this Agreement or applicable law.
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ARTICLE VIII
RESIGNATION AND REMOVAL OF TRUSTEE
8.1 RESIGNATION OF TRUSTEE. The Trustee may resign upon forty-five
days' prior written notice to the Compensation Committee of the Board of
Directors of the Company ("Compensation Committee") and the Committee, except
that any such resignation shall not be effective until the Compensation
Committee has appointed in writing a successor trustee, which must be a bank,
trust company, or an individual, and such successor has accepted the
appointment in writing; provided, however, that if such appointment is to
become effective at any time after the occurrence of a Change in Control,
then the consent of a majority of the Members to the appointment of such
successor trustee must be obtained. For all purposes of this Trust Agreement,
where the consent of a majority of the Members is required, the determination
of majority consent shall be based upon receiving the consent of any
combination of Members whose sum of vested Account Balances as of the time of
determination is greater than fifty percent of the sum of the vested Account
Balances for all Members at such time, rather than upon receiving the consent
of a majority of the number of Members. For purposes of this determination,
Beneficiaries of deceased Members shall be considered Members. The
Compensation Committee shall make a good faith effort, following receipt of
notice of resignation from the Trustee, to find and appoint a successor
Trustee who will adhere to the obligations imposed on such successor under
the terms of this Trust Agreement, and in particular, but without limitation,
the obligation to exercise judgment independent of the Company in the
circumstances described in Section 3.6 hereof. The appointment of a
successor Trustee shall also be conditioned upon obtaining from such
successor a written statement that the successor has read the Trust Agreement
and understands its obligations thereunder. If the consent of a majority of
the Members is required for the appointment of a successor trustee, then the
Trustee shall be responsible for securing such Member consents in a timely
fashion and, unless ordered by a court of competent jurisdiction, shall not
reveal to the Compensation Committee, the Company, the Committee or any other
person any information concerning such consents, except whether the required
majority has been achieved. Any notice sent to Members by the Trustee
canvassing the Members as to their consent to a successor trustee shall
include the name and address of the proposed successor trustee. Any consent
of a Member required under this Section 8.1 shall be deemed given if no
written objection is received by the Trustee from such Member within fourteen
days after request for such consent is sent postpaid by United States
registered or certified mail with return receipt requested to such Member.
Provisions of the Trust Agreement to the contrary notwithstanding, if the
Trustee gives written notice of resignation to the Compensation Committee and
the Committee and no successor trustee has been appointed within forty-five
days of receipt of such written notice, then the Trustee may apply to a court
of competent jurisdiction for judicial appointment of a successor trustee.
8.2 REMOVAL OF TRUSTEE. The Compensation Committee may remove the
Trustee upon forty-five days' (or such shorter period as may be agreed to by
the Trustee) prior written notice to the Trustee and the Committee, except
that any such removal shall not be effective until (a) the close of such
notice period, (b) the delivery by the Compensation Committee to the Trustee
of an instrument in writing appointing a successor trustee meeting the
requirements of
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Section 8.1, and (c) an acceptance of such appointment in writing executed by
such successor. Notwithstanding the provisions of the preceding sentence, if
such appointment of a successor trustee is to become effective at any time
after the occurrence of a Change in Control, then the removal of the Trustee
and the appointment of a successor trustee shall not be effective until the
Trustee has received the consent of a majority of the Members (as determined
in accordance with the provisions of Section 8.1 hereof) to such removal and
such appointment. Upon the receipt by the Trustee of a written notice of
removal, the Trustee shall be responsible for securing the Member consents
(if such consents are required pursuant to the preceding provisions of this
Section 8.2) in a timely fashion and, unless ordered by a court of competent
jurisdiction, shall not reveal to the Compensation Committee, Company, the
Committee or any other person any information concerning such consents,
except whether the required majority has been achieved. Any notice sent to
Members by the Trustee canvassing the Members as to their consent to the
removal of the Trustee and the appointment of a proposed successor trustee,
shall include the name and address of the proposed successor trustee. Any
consent of a Member required under this Section 8.2 shall be deemed given if
no written objection is received by the Trustee from such Member within
fourteen days after request for such consent is sent postpaid by United
States registered or certified mail with return receipt requested to such
Member.
8.3 SUCCESSOR TRUSTEE. All of the provisions set forth herein with
respect to the Trustee shall relate to each successor with the same force and
effect as if such successor had been originally named as the Trustee
hereunder.
8.4 TRANSFER OF TRUST FUND TO SUCCESSOR. Upon the resignation or
removal of the Trustee and appointment of a successor, the Trustee shall
transfer and deliver the Trust Fund to such successor. Following the
effective date of the appointment of the successor, the Trustee's
responsibility hereunder shall be limited to managing the assets in its
possession and transferring such assets to the successor, and settling its
final account. Neither the Trustee nor the successor shall be liable for the
acts of the other.
VIII-2
ARTICLE IX
DURATION AND TERMINATION OF TRUST AND AMENDMENT
9.1 DURATION AND TERMINATION. The Trust is hereby declared to be
irrevocable and shall continue until (a) all payments required by Section 3.6
have been made or (b) until the Trust Fund contains no assets and retains no
claims to recover assets from the Company or any other person or entity,
whichever shall first occur. Notwithstanding the preceding provisions of
this Section 9.1, unless earlier terminated, the Trust shall terminate
twenty-one (21) years after the death of the last to die of all of the
Members and their issue living on the effective date of this Trust Agreement;
provided, however, that if at that time the Trust may be continued in force
without violating the rule against perpetuities or any other law of the State
of Texas, then the Trust shall remain in effect until otherwise terminated as
provided hereunder.
9.2 DISTRIBUTION UPON TERMINATION. If this Trust terminates under the
provisions of Section 9.1, the Trustee shall liquidate the Trust Fund and,
after its final account has been settled as provided in Article IV, shall
distribute to the Company the net balance of any assets of the Trust
remaining after all expenses have been paid and all Benefits, whether or not
due and payable under the terms of the Plan on the date of such termination,
have been paid to the Members and Beneficiaries. Upon making such
distribution, the Trustee shall be relieved from all further liability. The
powers of the Trustee hereunder shall continue so long as any assets of the
Trust Fund remain in its hands.
9.3 AMENDMENT. The Compensation Committee may from time to time amend,
in whole or in part, any or all of the provisions of this Trust Agreement;
provided, however, that (a) no amendment will be made to this Trust Agreement
or the Plan which will cause this Trust Agreement, the Plan or the assets of
the Trust Fund to be governed by or subject to Part 2, 3, or 4 of Title I of
ERISA, (b) no such amendment shall adversely affect any Benefits to the date
of such amendment in respect of any Member or Beneficiary or the amount of
assets of the Trust Fund available to pay such Benefits, (c) no such
amendment shall purport to alter the irrevocable character of the Trust
established under this Trust Agreement, (d) no such amendment shall change
the duties or responsibilities of the Trustee unless the Trustee consents
thereto in writing, and (e) after the occurrence of a Change in Control, no
amendment will be made to this Trust Agreement without the consent of a
majority of the Members (as determined pursuant to the provisions of Section
8.1 hereof). Upon receipt of a request from the Compensation Committee for
an amendment which requires the consent of a majority of the Members, the
Trustee shall be responsible for securing Member consents in a timely
fashion, and unless ordered by a court of competent jurisdiction, shall not
reveal to the Compensation Committee, the Committee, the Company, or any
other person any information concerning such consents, except whether the
required majority has been achieved. Any consent of a Member required under
this Section 9.3 shall be deemed given if no written objection is received by
the Trustee from such Member within fourteen days after request for such
consent is sent postpaid by United States registered or certified mail with
return receipt requested to such Member. This Trust Agreement may be
amended, to the extent permitted in this Section 9.3, by an instrument in
writing executed on
IX-1
behalf of the Company by its authorized representatives, consents to which
instrument have been obtained from the required majority of Members if such
consents are required.
IX-2
ARTICLE X
CLAIMS OF COMPANY'S CREDITORS
10.1 INSOLVENCY OF COMPANY. As used in this Article X, the Company
shall be deemed to be "Insolvent" if (a) the Company is unable to pay its
debts as they come due, (b) the Company is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code (or any successor federal
statute) or other proceedings intended to liquidate or rehabilitate the
Company's estate, or (c) the Company is subject to regulation by federal or
state regulators and such regulators have determined that the Company is
insolvent or should be placed in insolvency or similar proceedings. In the
event that the Company shall be deemed Insolvent, the assets of the Trust
Fund shall be held for the benefit of the general creditors of the Company
(hereinafter referred to as "Bankruptcy Creditors").
10.2 TRUSTEE'S RESPONSIBILITIES IF COMPANY MAY BE INSOLVENT.
(a) If at any time the Company or a person claiming to be a creditor
of the Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall within thirty days independently determine
whether the Company is Insolvent and, pending such determination, the Trustee
shall discontinue any payment of Benefits under the Plan and this Trust
Agreement and shall hold the Trust Fund for the benefit of Bankruptcy
Creditors. The Trustee shall resume payments of Benefits under the Plan and
this Trust Agreement in accordance with Section 3.6 hereof only after the
Trustee has determined that the Company is not Insolvent (or is no longer
Insolvent, if the Trustee initially determined the Company to be Insolvent)
or upon receipt of an order of a court of competent jurisdiction requiring
such payments. The Company, by its chief executive officer and its board of
directors, shall further be obligated to give the Trustee prompt notice in
writing in the event that the Company becomes Insolvent, with the same
consequences as provided in the preceding two sentences. In determining
whether the Company is Insolvent, the Trustee may rely conclusively upon, and
shall be protected in relying upon, court records showing that the Company is
Insolvent, or a current report or statement from a nationally recognized
credit reporting agency showing that the Company is Insolvent. For purposes
of this Trust Agreement, knowledge and information concerning the Company
which is not in the possession of the Trustee shall not be imputed to the
Trustee. The Trustee shall have no duty or obligation to ascertain whether
the Company is Insolvent unless and until it receives a written notice that
the Company is Insolvent as described in the first or third sentence of this
Paragraph.
(b) If the Trustee determines that the Company is Insolvent, the
Trustee shall hold the assets of the Trust Fund for the benefit of the
Bankruptcy Creditors, and shall disburse the assets of the Trust Fund to
satisfy such claims as a court of competent jurisdiction shall direct.
(c) If the Trustee discontinues payment of Benefits pursuant to
Section10.2(a) and subsequently resumes such payments, the first payment to a
Member or Beneficiary following such discontinuance shall include an
aggregate amount equal to the
X-1
difference between the payments that would have been made to such Member or
Beneficiary, as applicable, under this Trust Agreement but for this Section
10.2 and the aggregate payments actually made to such Member or Beneficiary,
as applicable, by the Company pursuant to the Plan during any such period of
discontinuance. In the event that upon resumption of payments pursuant to
the preceding sentence, the assets of the Trust Fund are insufficient to pay
Benefits in full, Benefit payments to the affected Members and Beneficiaries
shall be prorated so as to equitably apportion the assets of the Trust Fund
among all affected Members and Beneficiaries in proportion to their Benefits.
10.3 TRUST RECOVERY OF PAYMENTS TO CREDITORS. In the event that at any
time an amount is paid from the Trust Fund to Bankruptcy Creditors of the
Company, the Trustee shall demand that the Company deposit into the Trust
Fund a sum equal to the amount paid by the Trust Fund to such Bankruptcy
Creditors and, if such payment is not made within ninety days of such demand,
the Trustee shall take such action as it deems prudent or advisable to
recover payment.
X-2
ARTICLE XI
ADOPTING ENTITIES
It is contemplated that other trades or businesses (whether or not
incorporated) which together with the Company would be deemed to be a "single
employer" within the meaning of subsections (b) or (c) of section 414 of the
Code that have adopted the Plan may adopt this Trust Agreement and thereby
become an adopting employer hereunder. The Company or the Committee shall
provide notice to the Trustee of each such entity that becomes an adopting
employer hereunder, and, upon such notice, each such entity shall be deemed
to be a party to the Trust Agreement. The provisions of the Trust Agreement
shall apply separately and equally to the Company and each other adopting
entity and their respective Members and their Beneficiaries in the same
manner as is expressly provided for the Company and its Members and their
Beneficiaries, except that (a) the power to appoint or otherwise affect the
Trustee and the power to amend the Trust Agreement shall be exercised by the
Compensation Committee alone and (b) the determination of whether a Change in
Control has occurred shall be based solely on the Company.
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ARTICLE XII
MISCELLANEOUS
12.1 PENNSYLVANIA LAWS TO GOVERN. This Trust Agreement and the Trust
hereby created shall be construed and regulated by the laws of the
Commonwealth of Pennsylvania.
12.2 TITLES AND HEADINGS NOT TO CONTROL. The titles to Articles and
headings of Sections in this Trust Agreement are placed herein for
convenience of reference only and, in the case of any conflict, the text of
this Trust Agreement, rather than such titles or headings, shall control.
12.3 AFFILIATES. As used in this Trust Agreement, the term "affiliate"
as applied to the Company or to the Trustee means any person or entity that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company or the Trustee,
as the case may be. For purposes of this definition, the term "control" as
used with respect to any person or entity shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the
management and policies of such person or entity, whether through the
ownership of an equity interest in such entity, by contract or otherwise.
12.4 CHANGE IN CONTROL. For purposes of this Trust Agreement, the term
"Change in Control" shall have the same meaning as is assigned to such term
under the Plan, as in effect on January1, 2002. The Company shall be
obligated to give the Trustee prompt notice in writing of the occurrence of a
Change in Control. In the event the Trustee receives such a notice or if at
any time a Member or a Beneficiary of a deceased Member alleges in writing to
the Trustee that a Change in Control has occurred, the Trustee shall within
thirty days independently determine whether a Change in Control has occurred
and, pending such determination, the Trustee shall assume that a Change in
Control has occurred for all purposes of this Trust Agreement and the Plan.
The Trustee shall have no duty or obligation to ascertain whether a Change in
Control has occurred unless it receives a written notice as described in
either of the preceding two sentences. In determining whether a Change in
Control has occurred, the Trustee may, in its sole discretion, make such
additional inquiries and/or take such additional measures as it deems
necessary, including, but not limited to, interviewing appropriate persons,
requesting affidavits, soliciting oral or written testimony under oath, or
engaging such independent third parties as the Trustee may deem necessary to
assist in making such determination. Notwithstanding the foregoing, if at
any time the chief executive officer or the board of directors of the Company
notifies the Trustee in writing that the Trustee should interpret this Trust
Agreement and the Plan as if a Change in Control had occurred, then for all
purposes of this Trust Agreement and the Plan, the Trustee shall so interpret
this Trust Agreement and the Plan. Once the notice described in the
preceding sentence is received by the Trustee, it may not be rescinded.
12.5 SUCCESSORS AND ASSIGNS. This Trust Agreement may not be assigned
by either party without the prior written consent of the other, and any
purported assignment without such
XII-1
prior written consent shall be null and void. This Trust Agreement shall be
binding upon the successors and permitted assigns of each party hereto.
12.6 CONTROLLING DOCUMENT. Should an inconsistency or conflict exist
between the specific terms of this Trust Agreement and those of the Plan,
then the relevant terms of this Trust Agreement shall govern and control.
XII-2
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be executed as of the day and year first above written.
DYNEGY INC.
By: /s/ Xxxx X. Xxxxx
---------------------------------------
Xxxx X. Xxxxx
Vice President - Rewards and Technology
VANGUARD FIDUCIARY TRUST COMPANY, Trustee
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxx
----------------------------------
Title: Assistant Secretary
---------------------------------
(iii)
