Exhibit 10.12

 

 

 

DIRECTORS’

DEFERRED COMPENSATION AND BENEFITS

TRUST AGREEMENT

by and among

SUNOCO, INC.,

MELLON TRUST OF NEW ENGLAND, N.A.

and

TOWERS, PERRIN, FORSTER & CROSBY, INC.

Amended and Restated Effective as of November 1, 2007

 

 

 

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TABLE OF CONTENTS

 

ARTICLE I       Definitions    2

1.1

  Account       2

1.2

  Benefits Fund    2

1.3

  Benefits Fund Amount    2

1.4

  Board of Directors    2

1.5

  Change in Control    2

1.6

  Chief Executive Officer    4

1.7

  CIC Date    4

1.8

  Committee    4

1.9

  Company    4

1.10

  ERISA    4

1.11

  Exchange Act    4

1.12

  Group    4

1.13

  Incumbent Board    4

1.14

  Insolvent or Insolvency    4

1.15

  Legal Defense Fund    4

1.16

  Legal Defense Fund Amount    4

1.17

  Payment Schedule    4

1.18

  Plan    4

1.19

  Plan Participant    5

1.20

  Potential Change in Control    5

1.21

  Recordkeeper    5

1.22

  Required Funding Amount    5

1.23

  Trust    6

1.24

  Trust Agreement    6

1.25

  Trust Corpus    6

1.26

  Trustee    6

ARTICLE II

 

    The Plans

   6

2.1

  Plans & Agreements Subject to Trust    6

2.2

  Liability for Payments    6

ARTICLE III

 

    Establishment of Trust

   6

3.1

  Principal of Trust    6

3.2

  Term and Revocability    7

3.3

  Grantor Trust    7

3.4

  Segregation of Funds; Rights of Creditors    7

ARTICLE IV

      Administration of Trust    7

4.1

  Authority and Duties of the Committee    7

4.2

  Action by the Committee    8

4.3

  Records, Reporting and Disclosure    8

4.4

  Bonding    9

 

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ARTICLE V       Potential Change in Control; Change in Control    9

5.1

  Potential Change in Control    9

5.2

  Change in Control    9 5.3   Method of Funding    9

5.4

  Additional Contributions; Sufficiency of Funds    10

5.5

  Additional Plans    10

5.6

  Calculation of Required Funding Amount    10

5.7

  Payment of Required Funding Amount    11

5.8

  Sunset Provision    12 ARTICLE VI       Legal Defense Fund    12

6.1

  Legal Defense Fund    12

6.2

  Trustee’s Duties    12

6.3

  Claims    13

6.4

  Insufficient Funds    13 ARTICLE VII       The Benefits Fund    14

7.1

  Benefits Fund    14

7.2

  Company Information    14

7.3

  Payment Schedule    15

7.4

  Entitlement to Benefits    15

7.5

  Payment of Benefits    15

7.6

  Notice of Benefits Payable    16

7.7

  Source of Payments    16

7.8

  Tax on Amounts Held in Trust Prior to Distribution    17 ARTICLE VIII  
    Investment Authority    17

8.1

  Investment Authority of Trustee    17

8.2

  Trustee’s Powers and Duties    18

8.3

  Investment of Trust Income    21

8.4

  Contractual Settlement and Income; Market Practice Settlements    21

8.5

  Losses Charged Against Trust Corpus    22 ARTICLE IX       Payments to Trust
Beneficiary When Company Is Insolvent    22

9.1

  Responsibilities of Trustee in Insolvency    22

9.2

  Resumption of Discontinued Payments    23 ARTICLE X       Payments to the
Company    23

10.1

  Reversion of Funds to Company    23

10.2

  Limitation Upon Company’s Ability to Direct Payments    24

10.3

  Limitation on Reversion of Legal Defense Fund Amount    24

 

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ARTICLE XI

       Powers, Duties & Responsibilities of Trustee    24

11.1

   Limitation of Liability    24

11.2

   Maintenance of Administrative Records    25

11.3

   Trustee Compensation and Reimbursement of Costs & Expenses    25

11.4

   Indemnification of Trustee by Company    26

11.5

   Powers of Trustee    26

11.6

   Responsibility of Trustee    27

ARTICLE XII

       Resignation and Removal of Trustee    28

12.1

   Resignation of Trustee    28

12.2

   Removal and Substitution of Trustee    28

12.3

   Appointment of Successor Trustee    28

12.4

   Failure to Appoint Successor Trustee    29

12.5

   Statements of Account Upon Removal or Resignation    29

12.6

   Transfer of Trust Corpus to Successor Trustee    30

ARTICLE XIII

       The Recordkeeper    30

13.1

   Appointment of Recordkeeper    30

13.2

   Maintenance of Records    30

13.3

   Indemnification of Recordkeeper by Company    30

13.4

   Resignation, Discharge & Replacement of Recordkeeper    31

ARTICLE XIV

       Authorization    31

14.1

   Actions by Board of Directors; Committee    31

14.2

   Actions by Chief Executive Officer; Treasurer    32

14.3

   Other Actions of Company    32

14.4

   Actions by the Committee    32

14.5

   Authorized Parties    32

ARTICLE XV

       Notices    33

15.1

   Notices    33

ARTICLE XVI

       Miscellaneous    34

16.1

   No Contract of Employment    34

16.2

   Rights of Plan Participants    34

16.3

   Amendment or Waiver    34

16.4

   Severability of Provisions    35

16.5

   Non-Alienability of Benefits    35

16.6

   Further Assurances    35

16.7

   Successors, Heirs, Assigns, and Personal Representatives    35

16.8

   Headings and Captions    35

16.9

   Gender and Number    36

16.10

   Payments to Incompetent Persons, Etc.    36

 

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16.11

   Governing Law; Situs of Trust    36

16.12

   Counterparts    36

16.13

   Acceptance by Trustee    36

16.14

   Insurance Policies    36

16.15

   Survival    36

16.16

   Entire Understanding    37

16.17

   Reliance on Representations    37

Schedules:

 

Schedule 2.1 - Benefit Plans and Other Arrangements Subject to Trust

   39

Schedule 16.17 - Customer Identification Program Notice

   40

 

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DIRECTORS’ DEFERRED COMPENSATION AND BENEFITS

TRUST AGREEMENT

This Directors’ Deferred Compensation and Benefits Trust Agreement, Amended and
Restated effective as of November 1, 2007, (the “Trust Agreement”), is by and
among SUNOCO, INC., a Pennsylvania corporation (the “Company”), MELLON TRUST OF
NEW ENGLAND, N.A., a national association (the “Trustee”), and TOWERS PERRIN,
FORSTER & CROSBY, INC., a Pennsylvania corporation (the “Recordkeeper”).

W I T N E S S E T H

WHEREAS, the Company is or may become obligated under the terms of certain
benefit plans, agreements, or other arrangements, to make payments to certain
persons who at any time prior to the occurrence of a Change in Control of the
Company were members of the Company’s Board of Directors (the “Plan
Participants”), and their beneficiaries; and

WHEREAS, in order to: (1) provide an alternative source of funds to assist the
Company in meeting its liabilities under the applicable director benefit plans,
agreements, or other arrangements; and (2) assure that future payment of such
amounts would not be improperly withheld in the event of a Change in Control of
the Company, the Company has established a Trust (the “Trust”) and contributes
certain assets held therein, subject to the claims of the Company’s creditors in
the event of the Company’s Insolvency until paid to Plan Participants and their
beneficiaries in the manner and at the times specified in the applicable
director benefit plans, agreements, or other arrangements; and

WHEREAS, Bankers Trust Company has resigned as trustee; and

WHEREAS, Mellon Trust of New England, N.A. has been appointed as Trustee in its
stead, and is willing to act as Trustee of the Trust, upon all of the terms and
conditions hereinafter set forth.

NOW THEREFORE, in consideration of the mutual terms, covenants, and conditions
herein contained, the mutual benefits to be derived hereunder, and other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:

 

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ARTICLE I

Definitions

As used in this Trust Agreement, the following terms shall have the meanings
herein specified:

1.1 Account - shall have the meaning provided herein at Section 5.7(c).

1.2 Benefits Fund - shall mean that portion of the Trust Corpus that is not in
the Legal Defense Fund.

1.3 Benefits Fund Amount - shall have the meaning provided herein at
Section 1.22(a).

1.4 Board of Directors - shall mean the Board of Directors of Sunoco, Inc., or
any successor thereto.

1.5 Change in Control - shall mean the occurrence of any of the following
events:

(a) The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning of Rule 13d 3 promulgated under the Exchange Act)
of 20% or more of either (1) the then-outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (2) the combined voting
power of the then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that, for purposes of this Section (a), the
following acquisitions shall not constitute a Change in Control: (A) any
acquisition directly from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any company controlled by, controlling or under
common control with the Company, or (D) any acquisition by any entity pursuant
to a transaction that complies with Sections (c)(1), (c)(2) and (c)(3) of this
definition;

(b) Individuals who, as of September 6, 2001, constitute the Board of Directors
(the “Incumbent Board”) cease for any reason to constitute at least a majority
of the Board of Directors; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company’s shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such

 

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individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board of Directors;

(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of
its subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or stock of another entity
by the Company or any of its subsidiaries (each, a “Business Combination”), in
each case unless, following such Business Combination, (1) all or substantially
all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation that, as a result of such transaction, owns the Company or all or
substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may be, (2) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior to the
Business Combination, and (3) at least a majority of the members of the board of
directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement or of the action of the Board of Directors providing for such Business
Combination; or

(d) Approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

 

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1.6 Chief Executive Officer - shall mean the Chief Executive Officer of Sunoco,
Inc. as of the date of reference.

1.7 CIC Date - shall have the meaning provided herein at Section 5.2.

1.8 Committee - shall mean the Governance Committee (or any successor thereof)
of the Board of Directors of Sunoco, Inc.; provided, that upon the occurrence of
any Change in Control, the membership of the Committee shall become fixed as the
members in office at the time of the Change in Control, and shall remain
unchanged for the duration of this Trust Agreement; and provided, further, that
in the event one or more members of the Committee resigns or otherwise
terminates his or her membership in the Committee after a Change in Control, the
remaining members of the Committee shall appoint a replacement by simple
majority vote.

1.9 Company - shall have the meaning set forth in the introduction to this Trust
Agreement.

1.10 ERISA - shall have the meaning set forth in the introduction to this Trust
Agreement.

1.11 Exchange Act - shall mean the Securities Exchange Act of 1934, as amended.

1.12 Group - shall mean persons who act in concert as described in Sections
13(d)(3) and/or 14(d)(2) of the Exchange Act.

1.13 Incumbent Board - shall have the meaning provided herein at Section 1.5(b).

1.14 Insolvent or Insolvency - shall mean, with respect to the Company, that
either:

(a) the Company is unable to pay its debts as they become due; or

(b) the Company is subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.

1.15 Legal Defense Fund - shall have the meaning provided herein at Section 6.1.

1.16 Legal Defense Fund Amount - shall mean an amount equal to the greater of
ten percent (10%) of the Benefits Fund Amount and $5,000,000.

1.17 Payment Schedule - shall have the meaning provided herein at Section 7.3.

1.18 Plan - shall have the meaning provided herein at Section 2.1.

 

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1.19 Plan Participant - shall have the meaning set forth in the introduction to
this Trust Agreement.

1.20 Potential Change in Control - shall mean the occurrence of any of the
following events or transactions:

(a) any person (other than Sunoco, Inc., or any affiliate or subsidiary thereof)
makes a tender offer for capital stock of Sunoco, Inc.;

(b) any person:

(1) becomes the beneficial owner, directly or indirectly, of capital stock of
Sunoco, Inc. in an amount which requires the filing of Schedule 13D or its
equivalent form pursuant to the Rules and Regulations under the Exchange Act;
and

(2) indicates in such Schedule 13D or equivalent filing that the purpose of such
capital stock acquisition is part of a plan or proposal that reasonably could
lead to a Change in Control of Sunoco, Inc.;

(c) the submission of a nominee or nominees for the position of director of
Sunoco, Inc. by a shareholder or Group of shareholders in a proxy solicitation
or otherwise which, in its judgment, the Board of Directors by subsequent
adoption of a resolution, determines might result in a Change in Control of
Sunoco, Inc.;

(d) any person files a pre-merger notification for the acquisition of capital
stock of Sunoco, Inc. pursuant to the Hart-Scott-Rodino Act; or

(e) the Board of Directors in its judgment determines by adoption of a
resolution that a Potential Change in Control of Sunoco, Inc. for purposes of
this Trust Agreement has occurred.

1.21 Recordkeeper - shall have the meaning set forth in the introduction to this
Trust Agreement.

1.22 Required Funding Amount - shall mean the aggregate of the amounts described
in the following subparagraphs (a) and (b) of this Section 1.22:

(a) an amount sufficient to provide all benefits accrued for each Plan
Participant (and any beneficiaries) under the Plans (including any interest or
earnings due on such accrual) through the date of the contribution, to the
extent not previously contributed; and

(b) the Legal Defense Fund Amount.

 

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1.23 Trust - shall have the meaning set forth in the introduction to this Trust
Agreement.

1.24 Trust Agreement - shall have the meaning set forth in the introduction to
this Trust Agreement.

1.25 Trust Corpus - shall mean the amounts delivered to the Trustee pursuant to
the terms hereof, less amounts distributed from the Trust pursuant to the terms
hereof, plus all income earned by the Trust, in whatever form held or invested
as provided herein.

1.26 Trustee - shall have the meaning set forth in the introduction to this
Trust Agreement.

ARTICLE II

The Plans

2.1 Plans & Agreements Subject to Trust. The plans, agreements, and other
arrangements that are subject to this Trust (each a “Plan” and, collectively the
“Plans”) are listed on Schedule 2.1 hereto. Prior to a Change in Control, the
Committee may from time to time designate such additional plans, agreements, and
other arrangements to be subject to this Trust, or delete any Plan from this
Trust. The Company shall immediately notify the Trustee and the Recordkeeper in
writing of any such changes. No Plans may be added or deleted from this Trust at
any time after a Change in Control.

2.2 Liability for Payments. The Company shall continue to be liable to the Plan
Participants to make all payments required under the terms of the Plans to the
extent such payments have not been made pursuant to this Trust Agreement.
Distributions made from the Trust to or for Plan Participants in respect of the
Plans pursuant to Article VII hereof, shall, to the extent of such
distributions, satisfy the Company’s (or certain of its subsidiaries’)
obligation to pay benefits to such Plan Participants under the Plans.

ARTICLE III

Establishment of Trust

3.1 Principal of Trust. The Trustee shall hold such sums of money and other
property as from time to time deposited by the Company and accepted by the
Trustee in trust to be held, administered and disposed of by the Trustee as
provided in this Trust Agreement.

 

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3.2 Term and Revocability. The Trust hereby established is revocable by the
Company but shall become irrevocable upon the occurrence of a Change in Control.
At any time prior to a Change in Control, this Trust may be terminated by the
Committee. Upon or after a Change in Control, this Trust shall not terminate
until the date on which Plan Participants and their beneficiaries are no longer
entitled to benefits pursuant to the terms of the Plans. Upon termination of the
Trust any assets remaining in the Trust shall be returned to the Company.

3.3 Grantor Trust. The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and
shall be construed accordingly. The Company represents and warrants to the
Trustee that the Plans for which benefits are or may become payable under this
Trust are not subject to Part 4 of Title I of ERISA. The Company shall indemnify
and hold harmless the Trustee, its parent, subsidiaries and affiliates and each
of their respective officers, directors, employees and agents from and against
all liability, loss and expense, including reasonable attorneys’ fees and
expenses suffered or incurred by any of the foregoing indemnitees as a result of
a breach of the foregoing representation and warranty. The provisions of this
subsection shall survive termination of this Agreement.

3.4 Segregation of Funds; Rights of Creditors. The principal of the Trust, and
any earnings thereon shall be separate and apart from other funds of the Company
and shall be used exclusively for the uses and purposes of Plan Participants and
general creditors as herein set forth. Plan Participants and their beneficiaries
shall have no preferred claim on, or any beneficial ownership interest in, any
assets of the Trust. Any rights created under the Plans and this Trust shall be
mere unsecured contractual rights of Plan Participants and their beneficiaries
against the Company. Any assets held by the Trust will be subject to the claims
of the Company’s general creditors under federal and state law in the event of
Insolvency.

ARTICLE IV

Administration of Trust

4.1 Authority and Duties of the Committee. It shall be the duty of the
Committee, on the basis of information supplied to it by the Company, to
determine:

(a) the eligibility of each Plan Participant to receive payment of benefits
under this Trust with respect to each Plan; and

 

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(b) the manner and time of payment of the benefits payable hereunder.

The Recordkeeper shall determine, on behalf of the Committee, the amount of any
benefit payable under this Trust to which each Plan Participant may be entitled.

The Trustee, on behalf of the Company, shall make such payments as the Committee
instructs the Trustee to pay, to Plan Participants from the Benefits Fund, as
provided in Article VII. The Committee shall have the full power and authority
to manage claims and appeals as set forth in the respective Plan, and to
construe, interpret and administer such Plan in accordance with its terms and
provisions.

4.2 Action by the Committee. A majority of the members of the Committee shall
constitute a quorum for the transaction of business at a meeting of the
Committee. Any action of the Committee may be taken upon the affirmative vote of
a majority of the members of the Committee at a meeting, or without a meeting by
mail, telegraph, telephone or electronic communication device; provided,
however, that all of the members of the Committee are informed of their right to
vote on the matter before the Committee and of the outcome of the vote thereon.

4.3 Records, Reporting and Disclosure. The Committee shall keep all individual
and group records relating to Plan Participants and former Plan Participants and
all other records necessary for the proper administration and operation of the
Trust. Such records shall be made available to the Company and to each Plan
Participant for examination during business hours except that a Plan Participant
shall examine only such records as pertain exclusively to the examining Plan
Participant and to the Plan, in general. The Committee shall prepare and shall
file as required by law or regulation all reports, forms, documents and other
items required by the Internal Revenue Code, and every other applicable statute,
each as amended, and all regulations thereunder (except that the Company, as
payer of the benefits, shall prepare and distribute to the proper recipients all
forms relating to withholding of income or wage taxes, Social Security taxes,
and other amounts which may be similarly reportable).

All income, deductions and credits attributable to the Trust belong to the
Company and will be included on the Company’s income tax returns. The Company
shall pay any federal, state, local, or other taxes imposed or levied with
respect to the assets and/or income of the Trust or any part thereof under
existing or future laws. Upon furnishing the Trustee with evidence reasonably
required by the Trustee of any such tax payments made directly by the Company,
the Company shall be entitled to receive reimbursement from the assets of the
Trust for the full amount of such taxes paid by it.

 

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4.4 Bonding. The Committee shall arrange any bonding that may be required by
law, but no amount in excess of the amount required by law (if any) shall be
required by the Trust.

ARTICLE V

Potential Change in Control; Change in Control

5.1 Potential Change in Control. If a Potential Change in Control occurs, the
Company shall immediately notify the Trustee and Recordkeeper and shall cause
the Required Funding Amount to be remitted to the Trustee as a contribution to
the Trust. The Required Funding Amount shall be paid to the Trust not later than
thirty (30) days after the Potential Change in Control.

5.2 Change in Control. Whenever a Change in Control is expected to occur, if the
date it will occur (the “CIC Date”) is reasonably ascertainable, then (i) the
Company shall notify the Trustee and the Recordkeeper of the CIC Date, (ii) the
Required Funding Amount shall be determined as of the CIC Date, and (iii) to the
extent that the amount then held in the Benefits Fund and Legal Defense Fund is
less than the Benefits Fund Amount or Legal Defense Fund Amount, respectively,
the Company shall cause the amount of the shortfall to be remitted to the
Trustee as an irrevocable contribution to the Trust not later than one
(1) business day before the CIC Date. If a Change in Control occurs, the Company
shall immediately notify the Trustee and Recordkeeper. In addition, the Required
Funding Amount shall be determined as of the actual date of the Change in
Control and, to the extent that the amount then held in the Trust Corpus (other
than the Legal Defense Fund) is less than the Required Funding Amount, the
Company shall immediately cause the amount of the shortfall to be remitted to
the Trustee, as an irrevocable contribution to the Trust, not later than one
(1) business day after the Change in Control. The Trustee may rely conclusively
on a notice from the Company that a Change of Control has occurred, and the
Trustee shall be fully protected in failing to act in the absence of such notice
from the Company.

5.3 Method of Funding. The contribution of the Required Funding Amount shall be
made in (1) cash or in property acceptable to the Trustee having a fair market
value equal to the Required Funding Amount, or in a combination of the two
and/or (2) a standby, irrevocable (except as provided in Section 9.1) letter of
credit, drawn on a bank acceptable to the Trustee, provided that the fair market
value of the contribution in the aggregate shall equal the Required Funding
Amount.

 

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5.4 Additional Contributions; Sufficiency of Funds. The Company shall be
obligated to continue to cause additional contributions (or increases to the
amount that may be drawn against the letter of credit) to be made as may be
necessary from time to time to insure that at all times following a Change in
Control the Trust contains sufficient funds, on a current basis, to pay all
benefits due to the Plan Participants (or their designated beneficiaries) under
the Plans, together with all reasonably anticipated claims against the Legal
Defense Fund. The Trustee shall be under no duty to determine the sufficiency,
or to enforce the making, of such contributions by the Company.

5.5 Additional Plans. In the event the Committee designates additional Plans
that are subject to this Trust Agreement, or the Plans subject to this Trust
Agreement are amended, after a Potential Change in Control or Change in Control,
the Treasurer of the Company shall, unless the Trust Corpus shall theretofore
have been released pursuant to Section 9.1 hereof, recalculate the Benefits Fund
Amount. If the amount so calculated exceeds the fair market value of the assets
then held in trust in the Benefits Fund, the Company shall promptly (and in no
event later than thirty (30) days from the date of such recalculation):

(a) pay to the Trustee an amount of cash (or property acceptable to the Trustee
having a fair market value equal to such amount, or some combination thereof)
equal to such excess; or

(b) increase the amount that may be drawn against the letter of credit described
in Section 5.3, above, to cover such excess.

If the Benefits Fund Amount so calculated is less than the fair market value of
the assets held in trust, the Trustee shall retain such difference.

5.6 Calculation of Required Funding Amount. As soon as practicable, but in no
event later than fifteen (15) days following the occurrence of any Potential
Change in Control, the Treasurer of the Company shall compute the Required
Funding Amount. Immediately thereafter, the Recordkeeper shall review the
Treasurer’s calculations of the Required Funding Amount (including without
limitation the calculations under Section 5.5 hereof). The Recordkeeper shall
complete its review prior to the thirtieth (30th) day following any Potential
Change in Control. If the Recordkeeper concludes that the amounts calculated by
the Treasurer are not sufficient to permit the Trustee to make all

 

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payments due or to become due under the Plans, together with the fees and
expenses described in Sections 6.2 and 6.3 below, the Treasurer shall increase
the Required Funding Amount to the amount so calculated by the Recordkeeper. The
Company agrees not to challenge the calculations of the Treasurer, and both the
Company and the Treasurer agree not to challenge the calculations of the
Recordkeeper, and the Trustee shall have no right or obligation to challenge or
question such calculation with regard to the Required Funding Amount (including,
without limitation, the amount determined under Section 5.5 hereof) upon and
after a Potential Change in Control or Change in Control. No Plan Participant
shall have the right to challenge the calculations of either the Treasurer or
the Recordkeeper with respect to the Required Funding Amount.

5.7 Payment of Required Funding Amount.

(a) Interest on Delinquent Payments. The Company agrees to pay interest on any
delinquent payment of the Required Funding Amount from the date on which such
payment is required to be made pursuant to this Article V, based upon the daily
average of the prime rate charged by Trustee, during the period of such
deficiency.

(b) Discount Rate for Distributions Due Later. In determining the Required
Funding Amount with respect to any payment or series of payments expected to be
due more than one (1) year after the date as of which the Required Funding
Amount is to be determined, the present value of such payment or series of
payments shall be calculated by using a discount rate equal to one percentage
point less than the then lowest annual yield to maturity on United States
Treasury obligations having then remaining maturities approximately equal to the
maturity of the payment or payments being valued.

(c) Schedule of Accounts. Each payment by the Company pursuant to this Article V
shall be accompanied by a schedule delivered to the Recordkeeper (as described
in Section 7.3 hereof) of the individual Plans for whose accounts such payment
is being made, which schedule sets forth the amounts delivered in respect of
each of the Plans. The Recordkeeper shall maintain in an equitable manner an
account for each Plan (the “Account”). Each Account shall consist of
contributions to and payments from the Benefits Fund which are allocable to the
Plan, and earnings thereon, less disbursements therefrom attributable to the
interest of the Plan in the entire Benefits Fund. On a monthly basis, the
Trustee shall advise the Recordkeeper in writing regarding the actual amounts
received by the Trust from the Company, and paid out from the Trust, in respect
of each of the Plans.

 

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5.8 Sunset Provision. Subject to Section 10.3, anything to the contrary in this
Trust Agreement or the Plans notwithstanding, in the event of a Potential Change
in Control, the procedures, rules and responsibilities that apply under this
Article V and under Sections 7.3, 8.5 and 11.2 hereof solely as a result of the
occurrence of such Potential Change in Control shall cease to apply six
(6) months after delivery of the Required Funding Amount to the Trustee if no
Change in Control shall have occurred during such six-month period, and the
Board of Directors determines, and so certifies to the Trustee, that a Change in
Control is not imminent, pending, or reasonably expected to occur (or upon such
certification by the Board of Directors acting unanimously before the expiration
of such six-month period), or upon the earlier termination of this Trust in a
manner consistent with Section 3.2 hereof. Such new six-month period shall
commence in the event of and upon the date of any subsequent Potential Change in
Control.

ARTICLE VI

Legal Defense Fund

6.1 Legal Defense Fund. The Trustee shall establish within the Trust a separate
fund, hereinafter referred to as the Legal Defense Fund. The Legal Defense Fund
shall consist of the portion of the Company’s contributions to the Trust that
represent the Legal Defense Fund Amount, or are otherwise designated for the
Legal Defense Fund in writing at the time of contribution, together with all
income, gains and losses and proceeds from the investment, reinvestment and sale
thereof, less all payments therefrom and expenses charged thereto in accordance
with the provisions of this Article. The Legal Defense Fund shall be held and
administered by the Trustee for the purpose of defraying the costs and expenses
incurred by Participants and beneficiaries associated with the enforcement of
their rights under the Plans by litigation or other legal action and the Trustee
in performing its duties under this Article. The Legal Defense Fund shall be
maintained and administered as a separate segregated account, provided, however,
that the assets of the Legal Defense Fund may be commingled with all other
assets of the Trust solely for investment purposes.

6.2 Trustee’s Duties. If, at any time after a Change in Control or during a
Potential Change in Control, legal proceedings are brought against the Trustee
by the Company or any other party seeking to invalidate any of the provisions of
this Trust Agreement as they relate to the Trust, or seeking to enjoin the
Trustee from paying any amounts from any Trust or from taking any other action
otherwise required or permitted

 

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to be taken by the Trustee under this Trust Agreement with respect to any Plan,
the Trustee shall take all steps that may be necessary in such proceeding to
uphold the validity and enforceability of the provisions of this Trust Agreement
as they relate to such Plan. The Trustee shall be empowered to retain counsel
and other appropriate experts, including actuaries, and accountants, to assist
it in making any determination under this Section. All costs and expenses
incurred by the Trustee in connection with any such proceeding (including,
without limitation, the payment of reasonable fees, costs and disbursements of
any counsel, actuaries, accountants or other experts retained by the Trustee in
connection with such proceeding) shall be charged to and paid from the Legal
Defense Fund. To the extent the Trustee’s legal fees and expenses exceed the
amount available in the Legal Defense Fund and the Company does not pay them
upon demand by the Trustee, such fees and expenses shall be paid by the Trustee
from the assets of the Trust Corpus.

6.3 Claims. If, at any time after a Change in Control, a Plan Participant or
beneficiary notifies the Trustee in writing that the Company has refused to pay
a claim asserted by such Plan Participant or beneficiary under any Plan, the
Plan Participant or beneficiary (“Claimant”) may demand payment from the Legal
Defense Fund with respect to expenses incurred in connection with the initiation
or defense of any litigation or other legal action by or against the Company or
any director, officer, stockholder or other person affiliated with the Company,
with respect to such claim. Such demand shall be made in writing by delivering
to the Trustee within 90 days of the date the Claimant incurs such expenses
(i) a certification signed by the Claimant that the Company is in default in
paying its obligations under the Plan, and (ii) itemizing in reasonable detail
in a form acceptable to the Trustee the expenses payable by the Legal Defense
Fund.

6.4 Insufficient Funds. In the event that on the date a Claimant’s expenses are
to be paid from the Legal Defense Fund other expenses have been claimed but not
yet paid and the aggregate amount of all claims exceeds the amount available in
the Legal Defense Fund, the Company shall be obligated to make an additional
contribution to the Legal Defense Fund. In the event the Company fails to make
such additional contribution, the Trustee shall promptly advise the Claimant and
shall pay only that portion of the amount of the claim to each Claimant
determined by multiplying such Claimant’s expenses by a fraction the numerator
of which is the amount held in the Legal Defense Fund, and the denominator of
which is the amount of the aggregate expenses claimed by all Claimants.
Notwithstanding any provision herein to the contrary, the Trustee shall be
required to act under this Section only to the extent there are sufficient
amounts available in the Legal Defense Fund to defray the costs and expenses the
Trustee reasonably anticipates will be incurred in connection with such action.

 

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ARTICLE VII

The Benefits Fund

7.1 Benefits Fund. The Trustee shall establish within the Trust a separate fund,
hereinafter referred to as the “Benefits Fund”. The Benefits Fund shall consist
of the portion of the Company’s contributions to the Trust that represent the
Benefit Amount, or are otherwise designated for the Benefits Fund in writing at
the time of contribution, together with all income, gains and losses and
proceeds from the investment, reinvestment and sale thereof, less all payments
therefrom and expenses charged thereto in accordance with the provisions of this
Article VII. The Benefits Fund shall be held and administered by the Trustee for
the purpose of paying Plan Participants benefits under the Plans in accordance
with the provisions of this Article VII.

7.2 Company Information. As soon as practicable, but in no event later than
thirty (30) days following the establishment of this Trust, the Recordkeeper
shall identify to the Company in writing the information deemed necessary to
enable the Recordkeeper to determine the amount of benefits payable to or with
respect to each Plan Participant in each Plan, including any benefits payable
after the Plan Participant’s death, and the recipient. The Company shall furnish
the information needed by the Recordkeeper in order to determine the amount of
any such benefit, and shall deliver to the Recordkeeper a letter of
instructions:

(a) describing the terms of each Plan;

(b) enclosing a copy of each Plan;

(c) listing the names, addresses, and Hay points or grade levels under the
salary administration program then in effect, for the Plan Participants (and
beneficiaries) covered by each Plan;

(d) setting forth the timing, form of distributions, and formula or other
methodology for determining the amounts to be paid to each Plan Participant and
beneficiary under each Plan; and

(e) instructing the Recordkeeper how and from whom to get any other information
needed to compute benefits under each Plan.

 

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The Company shall regularly, at least annually, furnish revised, up-dated
information to the Recordkeeper. In the event the Company refuses or neglects to
provide updated Plan Participant information, as contemplated herein, the
Recordkeeper shall be entitled to rely upon the most recent information
furnished to it by the Company.

7.3 Payment Schedule. Within forty-five (45) days following a Change in Control
or Potential Change in Control (or when the Company otherwise makes
contributions to the Trust), the Recordkeeper, on behalf of the Company, shall
deliver to the Trustee a schedule (the “Payment Schedule”) that indicates in the
case of all Plans, the amounts payable (including the fees and expenses incurred
by the Plans) in respect of each Plan Participant (and his or her
beneficiaries). The Payment Schedule shall be updated by the Recordkeeper as
necessary, but on at least an annual basis, in order to reflect changes therein.
Except as otherwise provided herein, the Trustee shall make payments to the Plan
Participants and their beneficiaries in accordance with such Payment Schedule
and shall pay such fees and expenses, unless paid by the Company. The Trustee
shall make provision for the reporting and withholding of any federal, state or
local taxes that may be required to be withheld with respect to any payment of
benefits from the Trust and shall pay amounts withheld to the appropriate taxing
authorities except to the extent that the Trustee shall have been previously
advised in writing that such amounts have been reported, withheld and paid by
the Company.

7.4 Entitlement to Benefits. The entitlement of a Plan Participant or his or her
beneficiaries to benefits under the Plans shall be determined promptly by the
Committee, and any claim for such benefits shall be considered and reviewed by
the Committee under the procedures set out in the Plans. As soon as is
reasonably practicable following any such review or determination by the
Committee, the Committee shall give notice of its findings to the Recordkeeper,
together with updated information as needed, in order to permit the Recordkeeper
to make a final determination of the benefits to be paid. Upon notice of such
findings by the Committee, the Recordkeeper promptly will make a final
determination of the amounts payable and will notify the Committee.

7.5 Payment of Benefits. The Company may make payment of benefits directly to
Plan Participants or their beneficiaries as they become due under the terms of
the Plans. The Company shall notify the Trustee and Recordkeeper of its decision
to make payment of benefits directly within a reasonable time prior to the time
amounts are payable to Plan Participants or their beneficiaries. Within thirty
(30) days of making any

 

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such direct payment, the Company shall provide the Trustee and the Recordkeeper
with a certification, in a form acceptable to each, indicating the date and
amount of such direct payment of benefits by the Company. The Trustee shall pay
benefits to Plan Participants and beneficiaries at the time provided in the
Payment Schedule, unless advised by the Company of its decision to pay the
benefit. If after the Company has indicated its intention to pay a benefit, the
Trustee does not receive certification of payment from the Company, as provided
in this Section, the Trustee shall pay such benefit to the Plan Participant or
beneficiary in accordance with the Payment Schedule. The Trustee shall be
completely protected in making any payment hereunder in accordance with the
Payment Schedule.

7.6 Notice of Benefits Payable. The Recordkeeper shall notify the Plan
Participant or the beneficiary of a deceased Plan Participant that the Plan
Participant’s benefits under a Plan have become payable. Such notice shall
include the amount of such benefits, the manner of payment (or, where
appropriate, the various payment options available) and the name, address and
social security number of the Plan Participant. Neither the Trustee nor the
Recordkeeper shall have any responsibility for determining whether any Plan
Participant or beneficiary has become entitled to any benefit under any of the
Plans, or whether any Plan Participant or beneficiary has died, and each of the
Trustee and the Recordkeeper shall be entitled to rely solely upon information
furnished by the Committee.

7.7 Source of Payments. All benefits payable from the Benefits Fund to a Plan
Participant or his beneficiary under a Plan shall be paid solely from the
Account of such Plan. Upon the satisfaction of all liabilities under a Plan in
respect of Plan Participants under a Plan, the Recordkeeper shall prepare and
deliver to the Trustee a certification showing the balance, if any, remaining in
the Account for such Plan. Such balance shall thereupon be reallocated ratably
by the Recordkeeper to the Accounts of other Plans covered by this Trust
(including Accounts which may have previously been reduced to a zero balance) in
the ratio that liabilities in respect of each such Plan bear to the total
liabilities of all such Plans. Upon the satisfaction of all liabilities of the
Company under all Plans, the Recordkeeper shall prepare and deliver a
certification to the Trustee and the Trustee shall thereupon distribute the
Trust Corpus to the Company.

 

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7.8 Tax on Amounts Held in Trust Prior to Distribution. Except as otherwise
provided herein, in the event of any final determination by the Internal Revenue
Service or a court of competent jurisdiction, which determination is not
appealable or with respect to which the time for appeal has expired, or the
receipt by the Trustee of a substantially unqualified opinion of tax counsel
selected by the Trustee, which determination determines, or which opinion
opines, that the Plan Participants or any particular Plan Participant is subject
to federal income taxation on amounts held in trust hereunder prior to the
distribution to the Plan Participants or Plan Participant of such amounts, the
Trustee, on receipt by the Trustee of such opinion or notice of such
determination, shall pay to each Plan Participant the portion of the Trust
Corpus includable in such Plan Participant’s federal gross income, less
applicable taxes. The Trustee shall not be required to obtain such opinion of
tax counsel unless the Internal Revenue Service, the Company, or the
Recordkeeper suggests to the Trustee that any of the Plan Participants may be
subject to income taxation on amounts held in the Trust prior to a distribution
hereunder and Trustee has doubts with respect thereto.

ARTICLE VIII

Investment Authority

8.1 Investment Authority of Trustee.

(a) Prior to a Change in Control: (1) the Company shall direct the Trustee, or
appoint one or more investment managers from time to time to direct the Trustee,
with respect to investment of the Trust Fund; (2) the Company and each
investment manager shall designate in writing the persons who are authorized to
represent such party in dealing with the Trustee; (3) the Trustee shall have no
investment duties for the Trust Fund; (4) the Trustee shall have no duty to
inquire whether investment directions received from the Company or an investment
manager are in accordance with the Plan, or to review the assets purchased,
retained or sold; and (5) the Trustee shall be fully indemnified by the Company
for any action taken in accordance with, or any failure to act in the absence
of, the Company’s or an investment manager’s directions.

(b) Upon and after a Change in Control: (1) the Trustee shall, subject to, and
to the extent provided in this Section and Section 8.2 below, have and exercise
sole investment discretion with respect to all of the Trust Corpus, and shall
use its good faith efforts to invest or reinvest all or such part of the Trust
Corpus as the Trustee believes prudent under the circumstances (taking into
account, among other things, the anticipated cash requirements for the payment
of benefits under the Plans based on information received from the

 

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Recordkeeper) solely in: (A) direct obligations of the United States of America
or agencies thereof, (B) obligations unconditionally and fully guaranteed as to
principal and interest by the United States of America, or (C) any registered
investment fund, including a fund for which the Trustee serves as investment
manager and/or custodian, established and maintained as a vehicle for short term
investment; and (2) with respect to such investments, the Trustee shall have the
powers and duties set forth in Section 8.2 below, in addition to those conferred
by law: provided, however, that the Trustee shall not be liable for any loss of
income due to liquidation of any investment which liquidation is necessary

to make payments or to reimburse expenses under the terms of this Trust
Agreement.

8.2 Trustee’s Powers and Duties.

(a) The Trustee shall have the powers and duties provided in this Section 8.2,
subject, prior to a Change in Control, to the direction of the Committee and or
investment managers appointed by the Committee in accordance with
Section 8.1(a), provided, however, that in no event may the Trustee invest in
(i) securities (including stock or rights to acquire stock) or obligations
issued by the Company, other than a de minimis amount held in common investment
vehicles in which the Trustee invests, (ii) any asset settled or held in
safekeeping outside of the United States, or (iii) real estate. For this
purpose, “real estate” includes, but is not limited to, real property,
leaseholds, mineral interests, and any form of asset which is secured by any of
the foregoing. All rights associated with assets of the Trust Corpus shall be
exercised by the Trustee or the person designated by the Trustee, and shall in
no event be exercisable by or rest with the Plan Participants.

(b) To invest and reinvest the Trust Corpus, without distinction between
principal and income, in any form of domestic property, whether or not
productive of income or consisting of wasting assets, provided that investments
shall be so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so;

(c) To invest all or any part of the Trust Corpus in interests in registered
investment companies, for which the Trustee or an affiliate of the Trustee
receives compensation for providing custodial, transfer agency, investment
advisory or other services (the Company acknowledges that interests in such
investment companies are not bank deposits and are not insured by, guaranteed
by, obligations of, or otherwise supported by the United States of America, the
Federal Deposit Insurance Corporation, or any bank or government entity);

 

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(d) To sell, convey, redeem, exchange, grant options for the purchase or
exchange of, or otherwise dispose of, any property, at public or private sale,
for cash or upon credit, with or without security, without obligation on the
part of any person dealing with the Trustee to see to the application of the
proceeds of, or to inquire into the propriety of, any such disposition;

(e) To hold, purchase and maintain, as owner, life insurance policies as
provided in Section 16.14 of this Trust Agreement;

(f) To exercise, personally or by general or limited proxy or power of attorney,
all voting and other rights appurtenant to any investment held in the Trust
Corpus and to delegate discretionary power to exercise all or any such rights to
trustees of a voting trust for any period of time;

(g) To join in or oppose any reorganization, recapitalization, consolidation,
merger or liquidation of any plan thereof, or any lease, mortgage or sale of the
property of any organization the securities of which are held in the Trust
Corpus; to pay from the Trust Corpus any assessments, charges or compensation
specified in any plan of reorganization, recapitalization, consolidation, merger
or liquidation; to deposit any property with any committee or depository; and to
retain any property allotted to the Trust Corpus in any reorganization,
recapitalization, consolidation, merger or liquidation;

(h) To exercise or sell, personally or by general or limited power of attorney,
any conversion, subscription or other rights, including the right to vote,
appurtenant to any investment held in the Trust Corpus;

(i) To borrow money for purposes of this Trust Agreement in any amount and upon
any reasonable terms and conditions from any lender (including the Trustee in
its individual capacity), and to pledge any property held in the Trust Corpus to
secure the repayment of any such loan;

(j) To compromise, settle or arbitrate any claim, debt, or obligation of or
against the Trust Corpus; to enforce or abstain from enforcing any right, claim,
debt or obligation; and to abandon any property determined by it to be
worthless;

 

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(k) To settle, compromise, or submit to arbitration any claims, debts, or damage
due or owing to or from the Trust Corpus, to commence or defend suits or legal
or administrative proceedings, and to represent the Trust in all legal and
administrative proceedings, provided, however, the Trustee shall not be
obligated to take any action or to appear and participate in any action that
would subject it to expense or liability unless the Company agrees to indemnify
the Trustee against the Trustee’s cost, expenses and liabilities (including
without limitation, attorneys’ fees and expenses) relating thereto and to be
primarily liable for such payments. If the Company does not pay such costs,
expenses and liabilities in a reasonably timely manner, the Trustee may obtain
payments from the Trust Corpus;

(l) To engage any legal counsel, including counsel to the Company, any enrolled
actuary, or any other suitable agents; to consult with such counsel, enrolled
actuary, or agents with respect to the construction of this Trust Agreement, the
duties of the Trustee hereunder, the transactions contemplated by this Trust
Agreement or any act which the Trustee proposes to take or omit; to rely upon
the advice of such counsel, enrolled actuary or agents and to pay from the Trust
Corpus all reasonable fees, expenses and compensations of such counsel, actuary
or agents;

(m) To organize and incorporate under the laws of any state one or more
corporations (and to acquire an interest in any such corporation that it may
have organized and incorporated) for the purpose of acquiring and holding title
to any property, interest or rights that the Trustee is authorized to acquire;

(n) To appoint custodians, subcustodians or subtrustees (including affiliates of
the Trustee), as to part or all of the Trust Corpus as necessary to fulfill its
duties and responsibilities under this Trust Agreement. The Trustee shall not be
responsible or liable for any losses or damages suffered by the Company arising
as a result of the insolvency of any custodian, subcustodian or subtrustee,
except to the extent the Trustee was negligent in its selection or continued
retention of such custodian, subcustodian or subtrustee. In no event shall the
Trustee be liable for the acts or omissions of any custodian, subcustodian or
subtrustee appointed pursuant to the direction of the Committee or an investment
manager;

 

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(o) To 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
Trustee), so long as the Trustee’s records clearly indicate that the assets held
are a part of the Trust Corpus. The 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
clearing facility, book-entry system, centralized custodial depository, or
similar organization;

(p) To hold any part or all of the Trust Corpus uninvested;

(q) To take all action necessary to pay for authorized transactions, including
borrowing or raising monies from any lender, including the Trustee, in its
corporate capacity in conjunction with its duties under this Trust Agreement and
upon such terms and conditions as the Trustee may deem advisable to settle
security purchases and/or foreign exchange or contracts for foreign exchange,
and securing the repayments thereof by pledging all or any part of the Account;
and

(r) To do all acts, whether or not expressly authorized, which the Trustee may
deem necessary or desirable for the protection of the Trust Corpus.

8.3 Investment of Trust Income. During the term of this Trust, income received
by the Trust, net of expenses and taxes, shall be accumulated and reinvested.

8.4 Contractual Settlement and Income; Market Practice Settlements.

(a) In accordance with the Trustee’s standard operating procedure, the Trustee
shall credit the Trust Corpus with income and maturity proceeds on securities,
net of any taxes, on contractual payment date or upon actual receipt. To the
extent the Trustee credits income on contractual payment date, the Trustee may
reverse such accounting entries to the contractual payment date if the Trustee
reasonably believes that such amount will not be received.

(b) In accordance with the Trustee’s standard operating procedure, the Trustee
will attend to the settlement of securities transactions on the basis of either
contractual settlement date accounting or actual settlement date accounting. To
the extent the Trustee settles certain securities transactions on the basis of
contractual settlement date accounting, the Trustee may reverse to the
contractual settlement date any entry relating to such contractual settlement if
the Trustee reasonably believes that such amount will not be received.

 

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(c) Settlements of transactions may be effected in trading and processing
practices customary in the jurisdiction or market where the transaction occurs.
The Company 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
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.

8.5 Losses Charged Against Trust Corpus. All losses of income or principal in
respect of, and expenses (including without limitation taxes and, as provided in
Article XI hereof, any expenses of the Trustee) charged against, the Trust
Corpus shall be for the account of the Company and the Company shall be
obligated to reimburse the Trust Corpus following a Potential Change in Control
or a Change in Control for any loss in principal amount of, or expense charged
against, the Trust Corpus except to the extent that the fair market value of the
Trust Corpus as of that date equals or exceeds the Required Funding Amount as of
that date. The Trustee shall promptly notify the Company in writing of the
amount of such reimbursement. The Company agrees that, upon receipt of such
notice, it will deliver to the Trustee to be held in the Trust an amount in cash
equal to any reimbursement amount specified by the Trustee, together with
interest from the date of receipt of such notice based upon the daily average of
the prime rate charged by the Trustee.

ARTICLE IX

Payments to Trust Beneficiary When Company Is Insolvent

9.1 Responsibilities of Trustee in Insolvency. At all times during the
continuance of this Trust as provided in Section 3.2 hereof, the principal and
income of the Trust shall be subject to claims of general creditors of Company
under federal and state law, as set forth below:

(a) The Board of Directors and the Chief Executive Officer of the Company shall
have the duty to immediately inform the Trustee in writing of the Company’s
Insolvency. If a person claiming to be a creditor of the Company alleges in
writing to the Trustee that the Company has become Insolvent, the Trustee shall
determine whether the Company is Insolvent and, pending such determination, the
Trustee shall discontinue payment of benefits to Plan Participants or their
beneficiaries.

 

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(b) Unless the Trustee has actual knowledge of the Company’s Insolvency, or has
received notice from the Company or a person claiming to be a creditor alleging
that the Company is Insolvent, the Trustee shall have no duty to inquire whether
the Company is Insolvent. In all cases, the Trustee shall be entitled to
conclusively rely upon the written certification of the Board of Directors or
the Chief Executive Officer of the Company when determining whether the Company
is insolvent.

(c) If at any time the Trustee has determined that the Company is Insolvent, the
Trustee shall discontinue payments to Plan Participants or their beneficiaries
and shall hold the assets of the Trust for the benefit of the Company’s general
creditors. Nothing in this Trust Agreement shall in any way diminish any rights
of Plan Participants or their beneficiaries to pursue their rights as general
creditors of the Company with respect to benefits due under the Plans or
otherwise.

(d) The Trustee shall resume the payments of benefits to Plan Participants or
their beneficiaries in accordance with Article VII of this Trust Agreement only
after the Trustee has determined that the Company is not Insolvent (or is no
longer Insolvent).

9.2 Resumption of Discontinued Payments. Provided that there are sufficient
assets, if the Trustee discontinues the payment of benefits from the Trust
pursuant to Section 9.1 hereof and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate amount of all
payments due to Plan Participants or their beneficiaries under the terms of the
Plans for the period of such discontinuance, less the aggregate amount of any
payments made to Plan Participants or their beneficiaries by the Company in lieu
of the payments provided for hereunder during any such period of discontinuance.

ARTICLE X

Payments to the Company

10.1 Reversion of Funds to Company. Subject to Section 10.3, in the event the
Company delivers the Required Funding Amount to the Trustee because of a
Potential Change in Control, the Trust Corpus shall be returned to the Company
six (6) months after delivery of the Required Funding Amount to the Trustee if
no Change in Control shall have occurred during such six-month period, and the
Board of Directors determines, and so certifies to the Trustee, that a Change in
Control is not imminent, pending, or reasonably expected to occur (or upon such
earlier certification by the Board of Directors acting unanimously), or upon the
earlier termination of this Trust in a manner

 

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consistent with Section 3.2 hereof. Such six-month period shall recommence in
the event of and upon the date of any subsequent Potential Change in Control. If
another Potential Change in Control should occur after the Trust Corpus has been
returned to the Company as provided in this Section 10.1, the Company shall
deliver a new Required Funding Amount to the Trustee pursuant to Article V
above. The Company shall notify the Trustee of the occurrence of a Potential
Change in Control and Change in Control and the Trustee may rely on such notice.

10.2 Limitation upon Company’s Ability to Direct Payments. After the Trust has
become irrevocable, the Company shall have no right or power to direct the
Trustee to return to the Company or to divert to others any of the Trust assets
before all payments of benefits have been made to Plan Participants and their
beneficiaries pursuant to the terms of the Plans.

10.3 Limitation on Reversion of Legal Defense Fund Amount. If the Trustee has
knowledge of any legal claims that would entitle a Plan Participant to
reimbursement of expenses under Article VI, or the Trustee reasonably believes
that such claims are likely to be made, no part of the Legal Defense Fund Amount
shall be returned to the Company at a time that any such claim is pending or any
expense associated with such claim has not been reimbursed. In addition, in no
event shall the Legal Defense Fund Amount be returned to the Company earlier
than the expiration of the six-month period described in the first sentence of
Section 10.1.

ARTICLE XI

Powers, Duties & Responsibilities of Trustee

11.1 Limitation of Liability. The duties and responsibilities of the Trustee
shall be limited to those expressly set forth in this Trust Agreement, and no
implied covenants or obligations shall be read into this Trust Agreement against
the Trustee. The Trustee shall not be liable for any act taken or omitted to be
taken hereunder if taken or omitted to be taken by it in good faith. The Trustee
shall also be fully protected in relying upon any notice given hereunder which
it in good faith believes to be genuine and executed and delivered in accordance
with this Trust Agreement. The Trustee may consult with legal counsel to be
selected by it, and the Trustee shall not be liable for any action taken or
suffered by it in good faith in accordance with the advice of such counsel.

 

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11.2 Maintenance of Administrative Records. The Trustee shall maintain such
books, records and accounts as may be necessary for the proper administration of
the Trust Corpus and shall render to the Company on a monthly basis commencing
on the first day of the month following the date the Trust Corpus includes more
than the initial deposit and earnings thereon, and for each month thereafter
until the termination of the Trust (and as of the date of such termination), an
accounting with respect to the Trust Corpus as of the end of such month (and as
of the date of such termination). After a Change in Control or a Potential
Change in Control has occurred, and once the Required Funding Amount has been
contributed to the Trust, the Trustee shall also provide the Recordkeeper with a
copy of such monthly accounting. Unless the Company shall have filed with the
Trustee written exceptions or objections to any such statement and account
within one hundred eighty (180) days after receipt thereof, the Company and all
Plan Participants shall be deemed to have approved such statement and account,
and in such case the Trustee shall be forever released and discharged with
respect to all matters and things reported in such statement and account as
though it had been settled by a decree of a court of competent jurisdiction in
an action or proceeding to which the Company and all Plan Participants were
parties.

The Trustee shall have the right, at the expense of the Trust, to apply at any
time to a court of competent jurisdiction for judicial settlement of any account
of the Trustee not previously settled as herein provided or for the
determination of any question of construction or for instructions. In any such
action or proceeding it shall be necessary to join as parties only the Trustee
and the Company (although the Trustee may also join such Plan Participants as it
may deem appropriate), and any judgment or decree entered therein shall be
conclusive.

11.3 Trustee Compensation and Reimbursement of Costs & Expenses. The Company
shall pay all administrative costs, and Trustee’s fees and expenses. If not so
paid, the fees and expenses shall be paid from the Trust Corpus, first from the
Legal Defense Fund and then, if necessary, from the Benefit Fund. The Trustee
shall be entitled to fees for services and expenses as mutually agreed. The
Company acknowledges that as part of the Trustee’s compensation, the Trustee may
earn interest on balances including disbursement balances and balances arising
from purchase and sale transactions. If the Trustee advances cash or securities
to the Trust for any purpose set forth in this Trust Agreement, any property at
any time held as part of the Trust Corpus shall be security therefor and the
Trustee shall be entitled to collect from the Trust sufficient cash for
reimbursement, and if such cash is insufficient, dispose of the assets of the
Trust Corpus to the extent necessary to obtain reimbursement. To the

 

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extent the Trustee advances funds to the Trust for disbursements or to effect
the settlement of purchase transactions, the Trustee shall be entitled to
collect from the Trust reasonable charges established under the Trustee’s
standard overdraft terms, conditions and procedures. After a Change in Control
has occurred, the fees of the Trustee shall be determined by the application of
the current rates then charged by the Trustee for the provision of the types of
investment and Trustee services contemplated in this Trust Agreement to trusts
of a similar character. The Trustee’s entitlement to reimbursement hereunder
shall not be affected by the resignation or removal of the Trustee or the
termination of the Trust.

11.4 Indemnification of Trustee by Company. The Company agrees to indemnify and
hold harmless the Trustee, its parent, subsidiaries and affiliates, and each of
their respective officers, directors, employees and agents from and against any
and all liabilities, damages, losses, claims or expenses as incurred by the
Trustee or any of the foregoing indemnitees (including expenses of investigation
and fees and disbursements of counsel to the Trustee and any taxes imposed on
the Trust Corpus or income of the Trust) arising out of or in connection with
the performance by the Trustee of its duties hereunder. This indemnification
shall survive the termination of this Trust Agreement. Any amount payable to the
Trustee under this Section 11.4, and not previously paid by the Company shall be
paid by the Company promptly upon demand therefor by the Trustee or, if the
Trustee so chooses in its sole discretion, from the Trust Corpus. In the event
that payment is made hereunder to the Trustee from the Trust Corpus, the Trustee
shall promptly notify the Company, in writing of the amount of such payment. The
Company agrees that, upon receipt of such notice, it will deliver to the Trustee
to be held in the Trust an amount in cash equal to any payments made from the
Trust Corpus to the Trustee pursuant to this Section 11.4, together with
interest from the date of receipt of such notice based upon the daily average of
the prime rate charged by the Trustee. The failure of the Company to transfer
any such amount shall not in any way impair the Trustee’s right to
indemnification, reimbursement and payment pursuant to Section 10.3 hereof, or
pursuant to this Section 11.4.

11.5 Powers of Trustee. The Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law, unless expressly provided otherwise
herein; provided, however, that if an insurance policy is held as an asset of
the Trust upon direction of the Company, the Trustee shall have no power to name
a beneficiary of the policy other than the Trust, to assign the policy (as
distinct from conversion of the policy

 

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to a different form) other than to a successor trustee, or to loan to any person
the proceeds of any borrowing against such policy. Notwithstanding any powers
granted to the Trustee pursuant to this Trust Agreement or applicable law, the
Trustee shall not have any power that could give this Trust the objective of
carrying on a business and dividing the gains therefrom, within the meaning of
Section 301.7701-2 of the Procedure and Administrative Regulations promulgated
pursuant to the Internal Revenue Code.

11.6 Responsibility of Trustee.

(a) The Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting in like capacity and
familiar with such matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that the Trustee shall incur no
liability to any person for any action taken pursuant to a direction, request or
approval which is contemplated by, and in conformity with, the terms of this
Trust Agreement.

(b) The Trustee is not a party to, and has no duties or responsibilities under,
the Plans other than those that may be expressly contained in this Trust
Agreement. In any case in which a provision of this Trust Agreement conflicts
with any provision in the Plans, this Trust Agreement shall control.

(c) The Trustee shall not be responsible for the title, validity or genuineness
of any property or evidence of title thereto received by it or delivered by it
pursuant to this Trust Agreement and shall be held harmless in acting upon any
notice, request, direction, instruction, consent, certification or other
instrument believed by it to be genuine and delivered by the proper party or
parties.

(d) Notwithstanding anything in this Trust Agreement to the contrary, the
Trustee shall not be responsible or liable for its failure to perform under this
Trust Agreement or for any losses to the Trust resulting from any event beyond
the reasonable control of the Trustee, its agents or custodians, 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
Trust’s property; or the breakdown, failure or malfunction of any utilities or
telecommunications systems; or any order or regulation of any banking or

 

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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. This Section shall survive the termination of this Trust Agreement.

(e) The Trustee shall not be liable for any act or omission of any other person
in carrying out any responsibility imposed upon such person and under no
circumstances shall the Trustee be liable for any indirect, consequential, or
special damages with respect to its role as Trustee.

ARTICLE XII

Resignation and Removal of Trustee

12.1 Resignation of Trustee. The Trustee may resign at any time by written
notice to the Company, which shall be effective sixty (60) days after receipt of
such notice unless the Company and Trustee agree otherwise. If a Change in
Control shall previously have occurred, the Trustee shall give such resignation
notice, in writing, to the Company and the members of the Incumbent Board then
serving on the Board of Directors, specifying a date (not less than sixty
(60) days after the giving of such notice) when such resignation shall take
effect.

12.2 Removal and Substitution of Trustee. The Company, or if a Change in Control
shall previously have occurred, the members of the Incumbent Board then serving
on the Board of Directors (or, if there are no members of the Incumbent Board
then serving on the Board of Directors, then by affirmative vote of at least
three-fourths (3/4) of the then-current Board of Directors), may at any time
remove the Trustee by giving written notice thereof to the Trustee, which shall
be effective sixty (60) days after receipt by the Trustee, unless the Trustee
and the party removing the Trustee agree otherwise.

12.3 Appointment of Successor Trustee. Promptly after the giving of notice of
resignation by the Trustee under Section 12.1 hereof, the Company, or if a
Change in Control shall previously have occurred, the members of the Incumbent
Board then serving on the Board of Directors (or, if there are no members of the
Incumbent Board then serving on the Board of Directors, then by affirmative vote
of at least three-fourths (3/4) of the then-current Board of Directors), shall
appoint a successor trustee, such successor trustee to become Trustee hereunder
upon the effective date specified in the Notice of Resignation, or Notice of
Removal, or such earlier date as agreed upon by the Trustee and the party
appointing the successor trustee.

 

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On or after a Change in Control, any successor trustee appointed or otherwise
designated under any provision of this Article XII, shall be a bank trust
department or other third party that, on the date of appointment:

(a) may be granted corporate trustee powers under the federal or state law of
the United States of America and is, in fact, duly qualified and authorized to
do trust business;

(b) has total assets of at least Ten Billion Dollars ($10,000,000,000); and

(c) has a credit rating of “A” or better from Moody’s Investors Service (or
other comparable credit rating from another similarly well-recognized credit
rating service).

12.4 Failure to Appoint Successor Trustee. If a successor trustee is not
appointed within sixty (60) days after the date of the Trustee’s notice of
resignation under Section 12.1 above, or the Company’s notice of removal under
Section 12.3 above, then the Trustee shall be entitled to petition a United
States District Court, or any court of competent jurisdiction in the state in
which the Trustee maintains its principal place of business, to appoint a
successor trustee or provide instructions. All expenses incurred by the Trustee
in connection with such petition shall be allowed as administrative expenses of
the Trust.

12.5 Statements of Account Upon Removal or Resignation. In the event of such
removal or resignation, the Trustee shall duly file with the Company and, on and
after a Change in Control, the members of the Incumbent Board then serving on
the Board of Directors if any, a written statement or statements of accounts and
proceedings as provided in Section 11.2 hereof for the period since the last
annual accounting of the Trustee, or if there has been no previous annual
accounting, for the period beginning on the date that the Trust Corpus consisted
of more than the initial contribution and earnings thereon. If written
objections to such account are not filed as provided in Section 11.2 hereof, the
Trustee shall to the maximum extent permitted by applicable law be forever
released and discharged from all liability and accountability with respect to
the propriety of its acts and transactions shown in such Account.

 

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12.6 Transfer of Trust Corpus to Successor Trustee. Upon resignation or removal
of the Trustee and appointment of a successor trustee, all assets shall be
transferred to the successor trustee as soon as practical following the
successor trustee’s appointment and acceptance, but in no event later than
thirty (30) days after such appointment and acceptance, unless a longer period
is agreed upon by the Trustee and such successor trustee, with the consent of
the Company. The Trustee shall continue to serve until the successor trustee
accepts the Trust and receives delivery of the Trust Corpus.

ARTICLE XIII

The Recordkeeper

13.1 Appointment of Recordkeeper. The Recordkeeper shall keep the records
provided in Section 13.2 and otherwise carry out the duties of the Recordkeeper
in this Trust Agreement. It is recognized that the Trustee shall have no
responsibility hereunder for any duty assigned to the Recordkeeper hereunder, or
its performance thereof. The Company shall pay the fees and expenses of the
Recordkeeper directly. After a Change of Control, the Trustee is authorized and
directed to pay the fees and expenses of the Recordkeeper from the Legal Defense
Fund, to the extent any invoice to the Company for such amounts shall remain
unpaid for 30 days.

13.2 Maintenance of Records. Except for the records dealing solely with the
Trust Corpus and its investment, which shall be maintained by the Trustee, the
Recordkeeper shall maintain all the records contemplated by this Trust
Agreement, including the maintenance of records for the separate Accounts of
each Plan under this Trust Agreement and the maintenance of Plan Participants’
interests. The Recordkeeper shall maintain individual records with respect to
each Plan Participant’s interest under each Plan.

13.3 Indemnification of Recordkeeper by Company. The Company agrees to indemnify
and hold harmless the Recordkeeper from and against any and all damages, losses,
claims, fees or expenses as incurred (including expenses of investigation and
fees and disbursements of counsel to the Recordkeeper) arising out of or in
connection with the performance by the Recordkeeper of its duties hereunder. In
the event that payment is required to be made to the Recordkeeper from the Trust
Corpus, as provided in Section 13.1 hereof, or this Section 13.3, the Trustee
shall promptly pay such amount and notify the Company in writing of the amount
of such payment. The Company agrees that, upon receipt of such notice, it will
deliver to the Trustee to be held in the Trust an amount in cash equal to any
payments made from the Trust Corpus to the Recordkeeper pursuant to this Section
13.3, together with interest from the date of receipt of such

 

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notice based upon the daily average of the prime rate charged by the Trustee.
The failure of the Company to transfer any such amount shall not in any way
impair the Recordkeeper’s right to indemnification, reimbursement and payment
pursuant to Section 13.1 hereof or this Section 13.3.

13.4 Resignation, Discharge & Replacement of Recordkeeper. The Recordkeeper may
resign and be discharged from its duties hereunder at any time by giving notice
in writing of such resignation to the Company or, if a Change in Control shall
previously have occurred, to the Company and the Trustee, specifying a date (not
less than sixty (60) days after the giving of such notice) when such resignation
shall take effect. Promptly after such notice, the Company or, if a Change in
Control shall previously have occurred, the Trustee shall appoint a successor
recordkeeper, such successor recordkeeper to become Recordkeeper hereunder upon
the resignation date specified in such notice. If a successor recordkeeper is
not appointed within sixty (60) days after such notice, the Recordkeeper shall
be entitled, at the expense of the Company, to petition a United States District
Court or any court of competent jurisdiction in the state in which the
Recordkeeper maintains its principal place of business to appoint its successor.
The Recordkeeper shall continue to serve until its successor accepts the
responsibility of recordkeeper. The Company or, if a Change in Control shall
previously have occurred, the Trustee may at any time substitute a new
recordkeeper by giving fifteen (15) days’ notice thereof to the Recordkeeper
then acting. In the event of such removal or resignation, the Recordkeeper shall
provide its successor with the records and information in its possession
relating to the performance of its duties under this Trust Agreement.

On or after a Change in Control, any successor recordkeeper appointed under this
Section 13.4 shall be an actuarial firm (or other third party providing such
services) by reputation and experience comparable to the former Recordkeeper.

ARTICLE XIV

Authorization

14.1 Actions by Board of Directors; Committee. Any action of the Board of
Directors or of the Committee pursuant to this Trust Agreement shall be
evidenced by a resolution adopted by the Board of Directors (or a duly
authorized committee thereof) or the Committee that is certified to the Trustee
by the Secretary or an Assistant Secretary of the Company under its corporate
seal, and the Trustee shall be fully protected in

 

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acting in accordance with such resolution. Upon a Change in Control, the
Secretary or an Assistant Secretary of the Company shall certify the names of
all “Non Employee Members of the Board of Directors” and all of the “Members of
the Incumbent Board of Directors then serving on the Board of Directors,” and
shall provide to the Trustee a written list of the names, signatures and extent
of authority of all persons authorized to direct the Trustee on behalf of the
Non Employee Members of the Board of Directors and Members of the Incumbent
Board of Directors then serving on the Board of Directors.

14.2 Actions by Chief Executive Officer; Treasurer. Any action of the Chief
Executive Officer or Treasurer pursuant to this Trust Agreement shall be
evidenced by a written notice or direction to such effect over the signature of
such officer.

14.3 Other Actions of Company. The Chief Executive Officer, President, Treasurer
or Secretary (or any Assistant Secretary) of the Company shall provide to the
Trustee in writing from time to time the names and specimen signatures of the
officers and other representatives authorized to act on behalf of the Company.
Any action of the Company pursuant to this Trust Agreement shall be evidenced by
a written notice or direction to such effect over the signature of any person on
such list.

14.4 Actions by the Committee. The Committee shall furnish the Trustee with a
written list of names, signatures and extent of authority of all persons
authorized to act on behalf of the Committee under the terms of the Trust
Agreement.

14.5 Authorized Parties. The Company shall cause each investment manager
appointed in accordance with Section 8.1 to furnish the Trustee with a written
list of the names and signatures of the person or persons who are authorized to
represent the investment manager. The individuals whose names appear on the
lists provided pursuant to Sections 14.1, 14.3 and 14.4 above, and those
individuals otherwise identified pursuant to Sections 14.1 and 14.2 above, shall
all be Authorized Parties. The Trustee and Recordkeeper shall be entitled to
rely on, and shall be fully protected in acting upon, direction from an
Authorized Party, within the authority of such Authorized Party, until notified
in writing by the Company, the Committee or investment manager, as appropriate,
of a change in the identity or authority of such Authorized Party.

 

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ARTICLE XV

Notices

15.1 Notices. All notices, requests, reports, demands and waivers to or upon the
respective parties hereto to be effective shall be in writing, by messenger, by
overnight courier or by registered or certified mail, postage prepaid and return
receipt requested, or shall be an electronic transmission subject to the
Trustee’s practices, and shall be deemed to have been duly given or made upon:

(a) delivery by hand; or

(b) upon receipt, provided the Trustee may, in its discretion, accept oral
directions and instructions and may require confirmation in writing.

Such communications shall be addressed and directed to the parties listed below
(except where this Trust Agreement expressly provides that it be directed to
another) as follows, or to such other address or recipient for a party as may be
hereafter notified by such party hereunder:

If to the Company (or any directors or officers thereof), or to the Committee:

SUNOCO, INC.

1735 Market Street – Suite LL

Philadelphia, PA 19103- 7583

Attention: General Counsel

If to the Trustee:

MELLON TRUST OF NEW ENGLAND, N.A.

135 Santilli Highway

Everett, MA 02149-1950

Attention:  Timothy Brennan

          Relationship Manager

          c/o Mellon Global Securities Services

If to the Recordkeeper:

TOWERS, PERRIN, FORSTER & CROSBY, INC.

Centre Square East

1500 Market Street

Philadelphia, PA 19102

Attention:  Sunoco, Inc. Retirement Plan Actuary

          c/o Philadelphia Consulting Office Manager

If to a Plan Participant, to the address of such Plan Participant provided by
the Recordkeeper.

 

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ARTICLE XVI

Miscellaneous

16.1 No Contract of Employment. Neither the establishment of this Trust, nor any
modification thereof, nor the payment of any benefits in connection herewith,
shall be construed as giving any Plan Participant, or any person whosoever, the
right to be retained in the service of the Company, and all Plan Participants
shall remain subject to discharge to the same extent as if this Trust had never
been established.

16.2 Rights of Plan Participants. Nothing in this Trust Agreement shall in any
way diminish any rights of any Plan Participant to pursue his or her rights as a
general creditor of the Company (or certain of its subsidiaries) under the
Plans.

16.3 Amendment or Waiver.

(a) Amendment Prior to Change in Control. This Trust Agreement may be amended
only by a written instrument executed by the Trustee, the Recordkeeper and the
Company. In case of conflict between the terms of this Trust Agreement and the
terms of the Plans, the terms of the Trust Agreement shall control; provided,
however, that:

(1) provisions that, in the determination of the Company, affect solely the
Trustee may, at the option of both the Trustee and the Company, be amended by a
writing executed only by the Company and the Trustee, with a copy of such
writing being provided to the Recordkeeper; and

(2) provisions that, in the determination of the Company, affect solely the
Recordkeeper may, at the option of both the Recordkeeper and the Company, be
amended by a writing executed only by the Company and the Recordkeeper, with a
copy of such writing being provided to the Trustee.

(b) Amendment Following Change in Control. Upon and after a Change in Control,
and unless otherwise required by applicable statute or regulation, the following
rules will govern amendments and waivers:

(1) this Trust Agreement may not be amended except by an instrument in writing
signed on behalf of the parties hereto together with the written consent of at
least eighty percent (80%) of the Plan Participants then entitled to receive
payments hereunder;

 

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(2) the parties hereto, together with the consent of not less than eighty
percent (80%) of the Plan Participants then entitled to receive payments
hereunder, may at any time waive compliance with any of the agreements or
conditions contained herein; and

(3) any agreement on the part of a party hereto or any Plan Participant to any
such waiver shall be valid if set forth in an instrument in writing signed on
behalf of such party or Plan Participant.

16.4 Severability of Provisions. If any provision of this Trust Agreement or the
application thereof to any person or circumstances shall be determined by a
court of proper jurisdiction to be invalid or unenforceable, such invalidity or
unenforceability shall not affect either:

(a) the application of such provision to persons or circumstances other than
those as to which it is held invalid or unenforceable; or

(b) any other provisions of this Trust Agreement (in which case, this Trust
Agreement shall be construed and enforced as if such invalid or unenforceable
provisions had not been included), and this Trust Agreement shall be otherwise
valid and enforced to the fullest extent permitted by law.

16.5 Non-Alienability of Benefits. Except as otherwise required by law, the
interests of the Plan Participants and their beneficiaries under this Trust may
not be anticipated, assigned (either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy, execution or other
legal or equitable process.

16.6 Further Assurances. The Company shall, at any time and from time to time,
upon the reasonable request of the Trustee and/or Recordkeeper, execute and
deliver such other instruments and do such further acts as may be necessary or
proper to effectuate the purposes of this Trust Agreement.

16.7 Successors, Heirs, Assigns, and Personal Representatives. This Trust
Agreement shall be binding upon the administrators, successors and permitted
assigns of the parties.

16.8 Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Trust
Agreement, and shall not be employed in the construction of the Trust Agreement.

 

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16.9 Gender and Number. Except where otherwise clearly indicated by context, the
masculine and the neuter shall include the feminine and the neuter, the singular
shall include the plural, and vice-versa.

16.10 Payments to Incompetent Persons, Etc. Any benefit payable hereunder to or
for the benefit of a minor, an incompetent person, or other person incapable of
receipting therefor shall be deemed paid when paid to such person’s guardian or
to the party providing or reasonably appearing to provide for the care of such
person, and such payment shall fully discharge the Company, the Recordkeeper,
the Trustee and all other parties with respect thereto.

16.11 Governing Law; Situs of Trust. TO THE EXTENT NOT PREEMPTED BY APPLICABLE
FEDERAL LAW, THIS TRUST SHALL BE CONSTRUED AND ENFORCED ACCORDING TO THE LAWS OF
THE COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO ANY PROVISIONS OF SUCH
LAWS REGARDING CHOICE OF LAWS OR CONFLICTS OF LAWS). THE PARTIES HEREBY
EXPRESSLY WAIVE, TO THE FULL EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO
TRIAL BY JURY WITH RESPECT TO ANY JUDICIAL PROCEEDING ARISING FROM OR RELATED TO
THIS TRUST AGREEMENT.

16.12 Counterparts. This Trust Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and such counterparts
shall constitute but one and the same instrument.

16.13 Acceptance by Trustee. The Trustee by joining in the execution of this
Trust Agreement hereby signifies its acceptance of the Trust hereby created.

16.14 Insurance Policies. Anything in this Trust Agreement to the contrary
notwithstanding, the Company may direct the Trustee to purchase one or more paid
up life insurance policies insuring the lives of one or more Plan Participants.
In such event, the Trustee will purchase such policies and shall not be
responsible under this Trust Agreement, or otherwise, in any way respecting the
acquisition, form, terms, payment provisions or issuer of such contract (other
than the execution of any documents incidental thereto, upon discretion of the
Company). The proceeds of any policy shall be credited to the applicable Plan
upon death of the insured Plan Participant.

16.15 Survival. The Company agrees that the provisions of Sections 11.3 and 11.4
hereof shall be binding on its successors and assigns and shall survive
termination, amendment or restatement of this Trust Agreement, or the
resignation or removal of the Trustee, and that this paragraph shall be
construed as a contract between the Company and the Trustee according to the
laws of the Commonwealth of Massachusetts.

 

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16.16 Entire Understanding. This Trust Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, arrangements and understandings
relating thereto. This Trust Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and legal
representatives.

16.17 Reliance on Representations.

(a) The Company, and the Trustee each acknowledge that the others will be
relying, and shall be entitled to rely, on the representations, undertakings and
acknowledgments of each of them as set forth in this Trust Agreement. The
Company, and the Trustee each agree to notify the others promptly if any of its
representations, undertakings, or acknowledgments set forth in this Trust
Agreement ceases to be true.

(b) Each of the parties represents and warrants to the other parties that it has
full authority to enter into this Trust Agreement upon the terms and conditions
hereof and that the individuals executing this Trust Agreement on its behalf
have the requisite authority to bind such party to this Trust Agreement. The
Company acknowledges that it has received and read the “Customer Identification
Program Notice,” a copy of which is attached to this Agreement as Schedule
16.17.

[COUNTERPART SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties have executed this Trust Agreement effective as
of the date first written above.

 

SUNOCO, INC.

(the “Company”)

By:   /s/ PAUL A. MULHOLLAND Name:   Paul A. Mulholland Title:   Treasurer

 

MELLON TRUST OF NEW ENGLAND, N.A.

(the “Trustee”)

By:   /s/ TIMOTHY M. BRENNAN Name:   Timothy M. Brennan Title:   Vice President

 

TOWERS, PERRIN, FORSTER & CROSBY, INC.

(the “Recordkeeper”)

By:   /s/ MATHIEU LUSSIER Name:   Mathieu Lussier Title:   Principal

 

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Schedule 2.1

to the

Directors’ Deferred Compensation and Benefits

Trust Agreement

Benefit Plans and Other Arrangements Subject to Trust

(1) Sunoco, Inc. Directors’ Deferred Compensation Plan I;

(2) Sunoco, Inc. Directors’ Deferred Compensation Plan II;

(3) The entire funding for all the Indemnification Agreements with the directors
set forth below shall be Five Million Dollars ($5,000,000.00) in the aggregate
upon a Potential Change in Control, and an amount upon a Change in Control
calculated on the basis of the Indemnification Agreements with the following
directors:

(a) Robert J. Darnall

(b) Gary W. Edwards

(c) Ursula O. Fairbairn

(d) Thomas P. Gerrity

(e) Rosemarie B. Greco

(f) John P. Jones, III

(g) James G. Kaiser

(h) R. Anderson Pew

(i) G. Jackson Ratcliffe

(j) John W. Rowe

(k) John K. Wulff

(4) Benefits payable to former directors of the Company (or their beneficiaries)
in pay status as of the date of termination of the Sunoco, Inc. Non-Employee
Directors’ Retirement Plan.

 

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Schedule 16.17

Customer Identification Program Notice

LOGO [g64849img-001.jpg]

CUSTOMER IDENTIFICATION PROGRAM NOTICE

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW

ACCOUNT

To help the government fight the funding of terrorism and money laundering
activities, all financial institutions are required by law to obtain, verify and
record information that identifies each individual or entity that opens an
account.

What this means for you: When you open an account, we will ask you for your
name, address, taxpayer or other government identification number and other
information, such as date of birth for individuals, that will allow us to
identify you. We may also ask to see identification documents such as a driver’s
license, passport or documents showing existence of the entity.

Rev. 09/03

 

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