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EXHIBIT 10.1
NEWPORT NEWS SHIPBUILDING INC.
AMENDED AND RESTATED
STOCK EMPLOYEE COMPENSATION TRUST AGREEMENT
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THIS AMENDED AND RESTATED STOCK EMPLOYEE COMPENSATION TRUST AGREEMENT,
dated as of August 1st, 2000, amending and restating the Stock Employee
Compensation Trust Agreement, dated as of December 1, 1997, by and between
NEWPORT NEWS SHIPBUILDING INC., a Delaware corporation, and WACHOVIA BANK, N.A.,
as trustee of the Trust created hereby, provides as follows:
ARTICLE I
DEFINITION
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1.1 Acquired Shares means NNS Securities acquired by the Trustee with
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the proceeds of a loan from the Company or a loan guaranteed by the Company.
1.2 Beneficiary means the individual or entity that is entitled to a
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benefit under one or more Plans on account of a Participant's death.
1.3 Board means the Board of Directors of the Company.
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1.4 Cash Equivalent means (i) investments in marketable, direct
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obligations issued or guaranteed by the United States of America, including any
governmental entity or agency or political subdivision thereof, maturing within
one year of the date of purchase; (ii) investments in commercial paper issued by
corporations or financial institutions maturing within 180 days from the date of
the original issue thereof, and rated "P-1" or better by Moody's or "A-1" or
better by S&P or an equivalent rating or better by any other nationally
recognized securities rating agency; (iii) investments in certificates of
deposit issued or acceptances accepted by or guaranteed by any Bank or any other
bank or trust company organized under the laws of the United States of America
or any state thereof or the District of Columbia, in each case having capital,
surplus and undivided profits totaling more than $500,000,000, maturing within
one year of the date of purchase; (iv) investments representing capital stock or
obligations issued to the Company or any of its subsidiaries or affiliates in
the course of the good faith settlement of claims against any other Person or by
reason of a composition or readjustment of debt or a reorganization of any
debtor of the Company or any of its subsidiaries or affiliates; (v) deposits
including interest-bearing deposits, maintained in the ordinary course of
business in banks; (vi) trade receivable and prepaid expenses, in each case
arising in the ordinary course of business; provided that such receivables and
prepaid expenses would be recorded as assets of the investor in accordance with
GAAP; (vii) endorsements for collection or deposit in the ordinary course of
business by the investor of bank drafts and similar negotiable instruments of
the investor received as payment for ordinary course of business trade
receivables; (viii) loans and advances to employees made in the ordinary course
of business and (ix) investments in money market funds rated AAAm by S&P (or an
equivalent rating by other agencies such as Moody's), provided that funds
invested solely in United States Treasury securities need not be rated.
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1.5 Change in Control means the first to occur of the following
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events (but no event other than the following events), except as otherwise
provided below:
(i) any person and any of their affiliates or associates
becomes the beneficial owner, directly or indirectly, of securities of
representing twenty percent (20%) or more of the combined voting power of the
Company's then outstanding securities having general voting rights, and a
majority of the Incumbent Board does not approve the acquisition before the
acquisition occurs; notwithstanding the foregoing, a Change in Control shall not
be deemed to occur pursuant to this clause (i) solely because twenty percent
(20%) or more of the combined voting power of the Company's then outstanding
securities having general voting rights is acquired by one or more employee
benefit plans maintained by the Corporation; or
(ii) members of the Incumbent Board cease to constitute a
majority of the Board; or
(iii) the consummation of any plan of merger, consolidation or
combination between the Company and any person, including becoming a subsidiary
of any other person without members of the Incumbent Board, as constituted
immediately prior to the merger, consolidation or combination constituting a
majority of the board of directors of (a) the surviving or successor
corporation, or, (b) if the surviving or successor corporation is a majority-
owned subsidiary of another corporation or corporations, the ultimate parent
company of the surviving or successor corporation; or
(iv) the consummation of any sale, exchange or other
disposition of all or substantially all of the Company's assets without members
of the Incumbent Board immediately prior to any sale, exchange or disposition of
all or substantially all of the Company's assets constituting a majority of the
board of directors of (a) the corporation which holds such assets after such
disposition, or (b) if such corporation is a majority-owned subsidiary of
another corporation or corporations, the ultimate parent company of the
successor corporation; or
(v) if any person and any of their affiliates and associates,
shall elect or have elected, during any period not exceeding 24 months, at least
twenty percent (20%) of the members of the Board, without the approval of the
Incumbent Board and such members are comprised of persons not serving as members
of the Board immediately prior to the formation of such group or the first
solicitation of proxies by such shareholder:
provided, however, that the Incumbent Board may determine that any transaction
is not a Change in Control.
1.6 Code means the Internal Revenue Code of 1986, as amended, and the
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regulations and rulings promulgated thereunder.
1.7 Common Stock means the common stock of the Company, $.01 par
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value.
1.8 Company means Newport News Shipbuilding Inc.
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1.9 Corporation means the Company and its subsidiaries and
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affiliates.
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1.10 ERISA means the Employee Retirement Income Security Act of 1974,
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as amended, and the regulations and rulings promulgated thereunder.
1.11 Extraordinary Dividend means any dividend or distribution of
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cash or other property (other than NNS Securities) made with respect to NNS
Securities, which the Board declares to be other than an ordinary dividend.
1.12 Incumbent Board means:
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(i) the members of the Board on the date immediately following
the date on which Common Stock was issued to the shareholders of Tenneco Inc.,
to the extent that they continue to serve as members of the Board; and
(ii) any individual who becomes a member of the Board after the
date specified in clause (i) if his election or nomination for election as a
director is approved by a vote of at least three-quarters of the then Incumbent
Board.
1.13 Insolvent means that (i) the Company is unable to pay its debts
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as they become due or (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
1.14 NNS Securities means equity securities of the Company.
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1.15 Participant means an individual who participates in one or more
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of the Plans.
1.16 Plans means the employee benefit and compensation plans,
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agreements, including employment agreements, trusts, programs and other
compensation and benefit arrangements listed on Exhibit A, as amended, from time
to time.
1.17 Principal Payment Date means each date on which a payment is
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made, or deemed to have been made, of any principal amount of any note or other
indebtedness related to the acquisition of Acquired Shares.
1.18 Released Collateral means the Acquired Shares released pursuant
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to Section 4.2 of this Trust Agreement.
1.19 Securities Transaction means a sale, exchange or transfer of NNS
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Securities by the Trustee or the grant of an option for the purchase or exchange
of NNS Securities by the Trustee.
1.20 Stock Plan means the Newport News Shipbuilding Inc. 401(k)
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Investment Plan for Salaried Employees or any successor or substitute employee
benefit plan of the Company that the Company and the Trustee agree shall serve
as the basis for implementing the provisions of Section 5.4 of this Trust
Agreement.
1.21 Termination Date means the earlier of (i) the date that the
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Corporation's obligations under the Plans are satisfied in full, (ii) the date
that the Trust Corpus is exhausted,
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(iii) the date established by resolution of the Board and (iv) the date on which
a Change in Control occurs. If a Change in Control occurs on account of a series
of transactions or events, the date on which the Change in Control occurs shall
be the date of the last of such transactions or events.
1.22 Trust means the trust established by this Trust Agreement.
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1.23 Trust Agreement means this Amended and Restated Stock Employee
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Compensation Trust Agreement.
1.24 Trust Corpus means any cash, Cash Equivalents or NNS Securities
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delivered to the Trustee or NNS Securities acquired by the Trustee, together
with any earnings thereon or any proceeds from the disposition thereof, reduced
by any losses of the Trust and any amounts distributed from the Trust in
accordance with the terms of this Trust Agreement.
1.25 Trustee means Wachovia Bank, N.A. in its capacity as trustee of
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this Trust.
ARTICLE II
PURPOSES
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2.1 General. The Corporation is or may become obligated under the
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Plans to make contributions or payments on behalf of its past, present or future
officers, employees and directors or their beneficiaries. The Company desires
and intends to fund certain of the Corporation's obligations arising under the
Plans with NNS Securities, which may be newly issued, issued out of treasury or
purchased directly or indirectly from third parties on the open market or in
privately negotiated transactions, the proceeds therefrom, or other property.
The Company is permitted under its current credit facilities and the indentures
governing its debt securities to purchase, or fund and cause the purchase by
third parties, of NNS Securities for such purposes and to apply, or cause the
application, of NNS Securities or the proceeds therefrom to its obligations
under the Plans. The purpose of the Trust is to hold NNS Securities or other
property as herein provided as a source to satisfy, in whole or in part, the
Corporation's obligations under the Plans. In furtherance of such purpose, the
Company desires to constitute, and does hereby constitute, this Trust as a
component of the Corporation's ongoing employee and director benefit and
compensation arrangements, for the purposes described above, and to employ this
Trust in a manner intended to comply with the provisions of its current credit
facilities and indentures and future credit facilities and indentures, as such
facilities and indentures may be amended, supplemented and replaced, from time
to time, as such provisions pertain to purchases of NNS Securities by or on
behalf or at the direction of the Company and to the application of NNS
Securities and any proceeds therefrom and of other payments, loans or advances
made with respect to the Plans and the Corporation's obligations thereunder, the
Corporation's employment agreements and its other compensation arrangements.
2.2 Continuing Obligation. The Company shall continue to be liable
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to make all payments required to be made by it under the terms of the Plans to
the extent that such
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payments have not been made pursuant to this Trust Agreement. Distributions made
from the Trust in respect of the Plans pursuant to Section 4.1 shall, to the
extent of such distributions, satisfy the Company's obligations under the Plans.
2.3 Code and ERISA Status. The Trust is intended to constitute a
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grantor trust within the meaning of section 671 of the Code, the assets of which
shall be subject to the claims of the Company's existing or future creditors.
The assets of the Trust are not, and are not intended to be, assets of the Plans
or any other plan or arrangement that is subject to ERISA. The Trust must be
administered and the Trust Agreement must be interpreted consistent with these
intents.
ARTICLE III
TRUST AND THE TRUST CORPUS
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3.1 Delivery of Funds and Purchase of Common Stock
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(a) Concurrently with the execution of this Trust Agreement
on December 1, 1997, the Company delivered to the Trustee one thousand dollars
($1,000.00). The Trustee shall hold such funds or apply such funds to the
purchase of Common Stock or Cash Equivalents to be administered and disposed of
by the Trustee as provided in this Trust Agreement.
(b) The Company may sell or otherwise deliver to the
Trustee additional amounts of cash or Cash Equivalents or NNS Securities to held
in trust under this Trust Agreement and administered and disposed of by the
Trustee as provided in this Trust Agreement. The Company may loan funds to the
Trustee and the Trustee shall apply the proceeds of such loans to the purchase
of NNS Securities in which case the NNS Securities purchased with the proceeds
of such loan shall be held as collateral for the repayment of such loans until
released from collateral as provided in Section 4.2 and otherwise to be
administered and disposed of by the Trustee as provided in this Trust Agreement.
Notwithstanding the preceding sentences, the Company shall be obligated to make
the contributions specified in Section 3.2 hereof.
3.2 Contributions to Repay Trust Indebtedness. The Company shall
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contribute to the Trust in cash an amount which, when added to cash dividends
received by the Trust in respect of Acquired Shares or other NNS Securities
(other than Extraordinary Dividends) and not previously applied under this
Section 3.2, shall enable the Trustee to make all payments of principal and
interest due under a note or other indebtedness of the Trust relating to the
acquisition of Acquired Shares on a timely basis or to make prepayments of such
principal or interest. The Trustee shall apply all dividends and earnings paid
in respect of Acquired Shares or other NNS Securities (other than Extraordinary
Dividends) to the payment of principal and interest under a note or such other
indebtedness of the Trust relating to the acquisition of Acquired Shares. To
the extent the Company fails to make any contribution required under this
Section 3.2, or to the extent the Company notifies the Trustee that it wishes
the Trustee to prepay any principal or interest under a note or other
indebtedness of the Trust relating to the acquisition of Acquired Shares without
making a contribution hereunder, such contribution shall be deemed
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to have been made in the form of forgiveness of principal and interest then due
and owing on such note or such other indebtedness.
3.3 Dividends. Except as otherwise provided herein, dividends
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(including Extraordinary Dividends) paid in cash on Acquired Shares or other NNS
Securities held by the Trust shall be applied to pay interest and repay
scheduled principal due under indebtedness of the Trust relating to the
acquisition of Acquired Shares. Dividends which are not in cash or in NNS
Securities (including Extraordinary Dividends, or portions thereof) shall be
reduced to cash by the Trustee and reinvested in NNS Securities or Cash
Equivalents as soon as practicable, provided that an Extraordinary Dividend
constituting a spin-off, split-off or similar transaction may be transferred to
a trust sponsored by the spun-off company or dealt with in another equitable
manner as directed by the Company. For purposes of this Agreement, NNS
Securities purchased with the proceeds of a non-cash dividend shall be deemed
Acquired Shares.
3.4. Investment of Trust Corpus. The Trust Corpus shall at all times
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be invested in NNS Securities, cash, Cash Equivalents, or a combination thereof.
ARTICLE IV
RELEASE OF THE TRUST CORPUS
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4.1 Use of Assets.
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(a) In accordance with the provisions hereof, but subject
to the provisions of Sections 3.2 and 3.3 hereof, the Trustee shall apply the
Trust Corpus, except to the extent that the Trust Corpus consists of Acquired
Shares which are not Released Collateral, as follows: (i) to the extent that
such available Trust Corpus consist of NNS Securities, to the extent and in
satisfaction of the Corporation's then current obligations under Plans that are
identified as stock based plans on Exhibit A, as Exhibit A may be amended from
time to time in accordance with Section 6.2, (in such order as is then listed
thereon or such other order as shall optimize the application of such Trust
Corpus to such Plans, as determined and instructed by the Company in good faith)
through in-kind distribution of such NNS Securities to such Plans or the
Participants therein pursuant to the terms of such Plans; (ii) if, after
satisfying all then current obligations of the Plans so listed as stock based
plans, there remain NNS Securities or other assets in such Trust Corpus so
available, such assets shall be sold by the Trustee in compliance with all
applicable federal and state securities laws and regulations (provided that the
Company shall make, or shall cause to be made, all applicable filings under such
laws and regulations) and the proceeds of such sale shall be transferred by the
Trustee to the non-stock based plans listed on Exhibit A, as Exhibit A may be
amended from time to time in accordance with Section 6.2, (in such order as is
then listed thereon or such other order as shall optimize the application of
such Trust Corpus to such Plans, as determined and instructed by the Company in
good faith) or the Participants therein pursuant to the terms of such Plans in
satisfaction of the Corporation's then current obligations thereunder; and (iii)
if, after satisfying all then current obligations of the Plans so listed on
Exhibit A, there remain NNS Securities or other assets in such Trust Corpus so
available, such assets shall be applied, within one year after becoming Released
Collateral as directed by the Company, to fund obligations of the Corporation,
or otherwise provide benefits to current employees of the Corporation, under one
or more employee compensation and benefit plans, employment agreements and other
agreements, programs or benefit and compensation arrangements, other than the
Plans, benefitting a broad cross-section of employees of the Corporation and for
no other purpose except as otherwise provided in Section 4.3. Notwithstanding
clauses (ii) and (iii) in the preceding sentence, the Trustee shall not be
required to apply the Trust Corpus in the manner described therein during the
period that the Company exercises its right to prevent the Trustee from
disposing of NNS Securities pursuant to Section 5.3, except to the extent that
the Trust Corpus contains sufficient cash or Cash Equivalents to comply with the
requirements thereof without disposing of NNS Securities. A direction by the
Company to apply the Trust Corpus for a purpose described in clause (iii) above
may include a direction to deliver NNS Securities in-kind or to dispose of NNS
Securities and apply the proceeds therefrom for such purpose.
(b) Except as provided in Sections 3.3, 4.1(a), 5.3 and
6.1, the Company shall have no power to direct the Trustee to take or omit to
take any action with respect to the Trust Corpus.
4.2 Release from Collateral. On each Principal Payment Date, the
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following number of Acquired Shares (and related collateral) shall be released
from collateral: The number of Acquired Shares held in the Trust as collateral
for that indebtedness immediately prior to the Principal Payment Date shall be
multiplied by a fraction, the numerator of which is the amount of the principal
payment made (or deemed to have been made) on such date and the denominator of
which is the principal amount of that indebtedness outstanding immediately prior
to such principal payment.
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4.3 Deliveries to Creditors of the Company. It is the intent of the
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parties hereto that the Trust Corpus is and shall remain at all times subject to
the claims of the general creditors of the Company. Accordingly, neither the
Trustee nor the Company shall create a security interest in the Trust Corpus in
favor of the Plans, any Participant or any Beneficiary or any creditor. If the
Trustee receives the notice provided for in Section 4.4, of if the Trustee
otherwise receives actual notice that the Company is Insolvent, the Trustee
shall make no further distributions of the Trust Corpus as directed by the
Company but shall deliver the entire amount of the Trust Corpus only as a court
of competent jurisdiction, or duly appointed receiver or other person authorized
to act by such a court, may direct. The Trustee shall resume distribution of
the Trust Corpus as directed by the Company under the terms hereof, upon no less
than 30 days' advance notice to the Company, if the Trustee determines that the
Company was not, or is no longer, insolvent. Such determination shall be made
in a timely fashion, and shall be based upon a decision of a court of competent
jurisdiction, a report of a nationally recognized appraisal firm or a
certification by the Chief Executive Officer of the Company or a determination
of the Board. Unless the Trustee has actual knowledge that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the Company is
Insolvent.
4.4 Notification of Insolvency. The Company shall advise the Trustee
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promptly in writing if the Company becomes Insolvent.
4.5 Notification of Change in Control. The Company shall advise the
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Trustee promptly in writing if there is a Change in Control.
ARTICLE V
ADMINISTRATION OF TRUST
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5.1 Trustee.
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(a) 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.
(b) If all or any part of the Trust Corpus is at any time
attached, garnished, or levied upon by any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment or decree
shall be made or entered by a court affecting such property or any part thereof,
then and in any of such events the Trustee is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree, and it shall not be liable to the Corporation, any Plan or any
Participant or Beneficiary by reason of such compliance even though such order,
writ, judgment or decree subsequently may be reversed, modified, annulled, set
aside or vacated.
(c) The Trustee or its agent 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, within 15 days of the end of each
calendar month, commencing with the month ending December 31, 1997, until the
termination of the Trust (and on the date of such termination or as promptly as
practicable thereafter), an accounting with respect to the Trust
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Corpus as of the end of the then most recent month (and as of the date of such
termination). The books, records and accounts of the Trustee relating to the
Trust Corpus shall be available to the Company or its agent for inspection or
audit during normal business hours upon reasonable notice to the Trustee.
(d) The Trustee shall not be liable for any act taken or
omitted to be taken in accordance with this Trust Agreement or the written
instructions of the Company. The Trustee shall be fully protected in relying
upon any notice or instruction given to it by the Company hereunder which it in
good faith believes to be genuine and executed and delivered in accordance with
this Trust Agreement.
(e) The Trustee may consult with legal counsel to be
selected by it, including counsel to the Company, and the Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel.
(f) The Trustee shall be reimbursed by the Company for its
reasonable expenses incurred in connection with the performance of its duties
hereunder and, in accordance with an agreement with the Company, shall be paid
reasonable fees for the performance of such duties. The Trustee may deduct
amounts payable to the Trustee from the Trust Corpus if not paid by the Company.
(g) Except for any damages, losses, claims or expenses
resulting from the Trustee's negligence or willful misconduct, the Company
agrees to indemnify and hold harmless the Trustee from and against any and all
damages, losses, claims or expenses as incurred (including reasonable expenses
of investigation and reasonable fees, charges 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. Without limiting the generality of the foregoing, the Trustee
shall be under no liability to any person for any loss of any kind which may
result by reason of any action taken by it pursuant to Section 5.4 or by reason
of its exercising any power or authority under Section 5.4.
(h) Subject to the provisions of this Trust Agreement, the
Trustee shall have the following additional powers and authority, in furtherance
of the purpose of the Trust, with respect to property constituting a part or all
of the Trust Corpus:
(i) At the direction of the Company, to acquire and
hold NNS Securities and cash or Cash Equivalents; to sell, exchange or transfer
any such property at public or private sale for cash or on credit and grant
options for the purchase or exchange thereof;
(ii) To exercise any conversion privilege or
subscription right available in connection with any such property; to oppose or
to consent to the reorganization, consolidation, merger or readjustment of the
finances of any corporation, company or association, or to the sale, mortgage,
pledge or lease of the property of any corporation, company or association, any
of the securities of which may at any time be held in the Trust and to do any
act with reference thereto, including the exercise of options, the making of
agreements or subscriptions and the payment of expenses, assessments or
subscriptions, which
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may be deemed necessary or advisable in connection therewith, and to hold and
retain any securities or other property which it may so acquire;
(iii) To commence or defend suits or legal proceedings
and to represent the Trust in all suits or legal proceedings; to settle,
compromise or submit to arbitration, any claims, debts or damages, due or owing
to or from the Trust;
(iv) To exercise, personally or by general or limited
power of attorney, any right, including the right to vote, appurtenant to any
NNS Securities or other property;
(v) To engage legal counsel, including counsel to
the Company, or any other suitable agents, to consult with such counsel 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 take, to rely upon the
advice of such counsel or agents, and to pay its reasonable fees, expenses and
compensation;
(vi) To register any securities held by it in its own
name or in the name of any custodian of such property or of its nominee,
including the nominee of any system for the central handling of securities, with
or without the addition of words indicating that such securities are held in a
fiduciary capacity, to deposit or arrange for the deposit of any such securities
with such a system and to hold any securities in bearer form;
(vii) At the direction of the Company, to make,
execute and deliver, as Trustee, any and all deeds, leases, notes, bonds,
guarantees, mortgages, conveyances, contracts, waivers, proxies, releases or
other instruments in writing necessary or proper for the exercise of any of the
foregoing powers; and
(viii) To take any other action necessary or advisable
in furtherance, of the foregoing powers and the purposes of this Trust.
5.2 Successor Trustee. The Trustee may resign and be discharged from
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its duties hereunder at any time by giving to the Company notice in writing of
such resignation specifying a date (not less than 90 days after the giving of
such notice or such shorter period as may be agreed to by the Company in
writing), when such resignation shall take effect. Promptly after such notice,
the Company shall appoint an independent financial institution as successor
trustee and such independent financial institution shall become Trustee
hereunder, upon the resignation date specified in such notice. The Trustee
shall continue to serve until its successor accepts the Trust and receives
delivery of the Trust Corpus. The Company may at any time substitute an
independent financial institution as successor trustee by giving 15 days' notice
thereof to the Trustee or such shorter period as may be agreed to by the Trustee
in writing. In the event of such removal or resignation, the Trustee shall duly
file with the Company a written statement or statements of account as provided
in Section 5.1(c) for the period since the last previous quarterly accounting of
the Trust.
5.3 Limitations on Sales. Except as directed pursuant to Section
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4.1(a) or as provided in Section 5.4(b) hereof, the Trustee shall not enter into
a Securities Transaction unless
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the Trustee shall have given the Company 10 business days' prior notice of such
Securities Transaction. The Trustee's notice shall state with respect to such
Securities Transaction (i) the amount of NNS Securities involved, (ii) whether
such Securities Transaction will be effected through the public markets and
(iii) the date such Securities Transaction is proposed to be entered into. If
the Company is advised in writing by counsel or a recognized independent
investment banking firm that such Securities Transaction would adversely affect
any financing by the Company that had been completed or contemplated by the
Company prior to the receipt of such notice or if the Company determines in its
good faith judgment that such Securities Transaction would require the Company
to disclose material information which the Company has a bona fide business
purpose for preserving as confidential or that the Company is unable to comply
with Securities Exchange Commission requirements prior to such Securities
Transaction, the Company may give notice to the Trustee not to effect such
Securities Transaction prior to the date specified in the Trustee's notice. Upon
receipt of such a notice from the Company, the Trustee shall not effect such
Securities Transaction for the period specified in the Company's notice.
5.4 Voting and Tendering of Common Stock.
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(a) The shares of Common Stock held by the Trust shall be voted
on each matter brought before an annual or special stockholders' meeting of the
Company in the manner provided for herein. Prior to each such meeting of
stockholders, the Company shall cause the trustee of the Stock Plan or the
transfer agent and registrar for the Common Stock to furnish to the Trustee, at
least three business days in advance of such meeting, a document setting forth
the percentages of the votes to be cast in favor, in opposition or in abstention
on each matter by such trustee with respect to shares of Common Stock (and
securities convertible into Common Stock) held by the Stock Plan as of the
record date for such stockholders' meeting, such votes to be based upon the
instructions received as of such time from Stock Plan Participants and otherwise
in accordance with the provisions of the Stock Plan then in effect, but without
regard to any failure on the part of such trustee to follow such instructions or
otherwise to abide by such provisions by reason of, for example, its fiduciary
obligations under ERISA. Notwithstanding the foregoing, the document described
in the immediately preceding sentence setting forth the percentages of the votes
to be cast in favor, in opposition or in abstention on each matter by the
trustee with respect to shares of Common Stock (and securities convertible into
Common Stock) held by the Stock Plan as of the record date for such
stockholders' meeting shall be based upon the instructions received as of such
time from Stock Plan Participants other than any Stock Plan Participant who is a
member of the Board. Upon timely receipt of such document by the Trustee, the
Trustee shall on each such matter vote the number of shares (including
fractional shares) of Common Stock held by the Trust in accordance with such
percentages.
(b) As more fully set forth herein, the shares of Common stock
(and securities convertible into Common stock) held by the Trust shall be
tendered or exchanged by the Trustee in the same proportion as shares of Common
Stock held in the Stock Plan. Prior to the scheduled expiration date of a tender
or exchange offer for shares of Common Stock, the Company shall cause the
trustee of the Stock Plan to furnish to the Trustee, at least three business
days in advance of such scheduled expiration date, a document setting forth the
percentage of shares of Common Stock (and securities convertible into Common
Stock) held by the Stock Plan which will be tendered or exchanged, such
percentage to be based upon the instructions received from
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Stock Plan Participants and otherwise in accordance with the provisions of the
Stock Plan then in effect, but without regard to any failure on the part of such
trustee to follow such instructions or otherwise to abide by such provisions by
reason of, for example, its fiduciary obligations under ERISA. In the event the
scheduled expiration date of such offer is changed, the foregoing provisions of
this Section 5.4(b) shall be applied to each subsequent scheduled expiration
date. Upon timely receipt of such document by the Trustee, the Trustee shall
tender or exchange the number of shares of Common Stock held by the Trust in the
same percentage as shares of Common Stock (and securities convertible into
Common Stock) held by the Stock Plan are to be tendered or exchanged, based upon
the preceding provisions of this Section 5.4(b).
(c) All actions taken by or on behalf of Participants pursuant
to this Section 5.4, and any information in respect of such actions, shall be
held confidential by the Trustee and shall not be divulged or released to any
person, other than (i) agents of the Trustee who are not affiliated with the
Corporation, (ii) by virtue of the execution by the Trustee of any proxy,
consent or letter of transmittal for the shares of Common Stock held in the
Trust, or (iii) as may be required by court order.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
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6.1 Termination. The Trust shall be terminated on the earlier of
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November 15, 2015, or the Termination Date. Upon termination of the Trust, any
remaining portion of the Trust Corpus shall be applied in the following order:
First, except to the extent that the Trust Corpus consists of Acquired Shares
which are not Released Collateral, (i) to the extent that such available Trust
Corpus consist of NNS Securities, to the extent and in satisfaction of the
Corporation's then current obligations under Plans that are identified as stock
based plans on Exhibit A, as Exhibit A may be amended from time to time in
accordance with Section 6.2, (in such order as is then listed thereon or such
other order as shall optimize the application of such Trust Corpus to such
Plans, as determined and instructed by the Company in good faith) through in-
kind distribution of such NNS Securities to such Plans or the Participants
therein pursuant to the terms of such Plans; (ii) if, after satisfying all then
current obligations of the Plans so listed as stock based plans, there remain
NNS Securities or other assets in such Trust Corpus so available, such assets
shall be sold by the Trustee in compliance with all applicable federal and state
securities laws and regulations (provided that the Company shall make, or shall
cause to be made, all applicable filings under such laws and regulations) and
the proceeds of such sale shall be transferred by the Trustee to the non-stock
based plans listed on Exhibit A, as Exhibit A may be amended from time to time
in accordance with Section 6.2, (in such order as is then listed thereon or such
other order as shall optimize the application of such Trust Corpus to such
Plans, as determined and instructed by the Company in good faith) or the
Participants therein pursuant to the terms of such Plans in satisfaction of the
Corporation's then current obligations thereunder; and (iii) if, after
satisfying all then current obligations of the Plans so listed on Exhibit A,
there remain NNS Securities or other assets in such Trust Corpus so available,
such assets shall be applied, or otherwise provide benefits to current employees
of the Corporation, under one or more employee compensation and benefit plans,
employment agreements and other agreements, programs or arrangements, other than
the Plans, benefitting a broad cross-section of employees of the Corporation;
Second, to be sold with the proceeds applied to satisfy any outstanding
indebtedness of the Trust; Third, (i) to the extent that such available Trust
Corpus consist of NNS Securities, to the extent and in satisfaction of the
Corporation's then current obligations under Plans that are identified as stock
based plans on Exhibit A, as Exhibit A may be amended from time to time in
accordance with Section 6.2, (in such order as is then listed thereon or such
other order as shall optimize the application of such Trust Corpus to such
Plans, as determined and instructed by the Company in good faith) through in-
kind distribution of such NNS Securities to such Plans or the Participants
therein pursuant to the terms of such Plans; and (ii) if, after satisfying all
then current obligations of the Plans so listed as stock based plans, there
remain NNS Securities or other assets in such Trust Corpus, such assets shall be
sold by the Trustee in compliance with all applicable federal and state
securities laws and regulations (provided that the Company shall make, or shall
cause to be made, all applicable filings under such laws and regulations) and
the proceeds of such sale shall be transferred by the Trustee to the non-stock
based plans listed on Exhibit A, as Exhibit A may be amended from time to time
in accordance with Section 6.2, (in such order as is then listed thereon or such
other order as shall optimize the application of such Trust Corpus to such
Plans, as determined and instructed by the Company in good faith) or the
Participants therein pursuant to the terms of such Plans in satisfaction of the
Corporation's then current obligations thereunder; and Fourth, to fund
obligations of the Corporation, or otherwise provide benefits to current
employees of the Corporation, under one or more employee compensation and
benefit plans, employment agreements and other agreements, programs or
arrangements, other than the Plans, benefitting a broad cross-section of
employees of the Corporation and for no other purpose except as provided in
Section 4.3. In no event shall the Company receive any distribution of the Trust
Corpus upon
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<PAGE>
termination of the Trust, except cash or cash proceeds in repayment of
indebtedness to the Company incurred by the Trustee.
6.2 Amendments in General. The Company may, in its sole discretion, from
---------------------
time to time amend, in whole or in part, any or all of the provisions of this
Trust Agreement, including, without limitation, by adding to, or subtracting
from, or making any other change to, Exhibit A hereto one or more employee
benefit plans (within the meaning of Section 3(3) of ERISA) or plans or
arrangements that are not employee benefit plans (within the meaning of such
Section); provided, that (a) in making any modification to Exhibit A hereto, the
Company shall act in good faith taking into account the best interests of a
broad cross-section of employees, and (b) the Company shall ensure that at all
times Exhibit A shall include at least one employee benefit plan that is not an
employee benefit plan within the meaning of Section 3(3) of ERISA. No amendment
to this Trust Agreement shall be made that would (a) purport to alter the
irrevocable character of the Trust, (b) without the Trustee's prior written
consent, adversely affect the Trustee's rights, increase the Trustee's duties or
responsibilities or decrease the Trustee's compensation hereunder, or (c)
without the approval of a majority of the Stock Plan Participants, alter Article
IV (of which Exhibit A shall not be deemed a part for purposes of this clause
(c)), Section 5.4, Section 6.1, this Section 6.2 or any definition set forth in
Article I relating to such provisions. For purposes of determining approval by
Stock Plan Participants, each Stock Plan Participant shall have one vote for
each share of Common Stock allocated to such Stock Plan Participant's account in
the Stock Plan. A vote in favor of an amendment by Stock Plan Participants
holding a majority of the total voting power, as described in the foregoing
sentence, shall constitute approval of such amendment.
6.3 Specific Amendments. Notwithstanding Section 6.2, the Company
-------------------
may amend this Trust Agreement from time to time in such a manner as may be
necessary, in the opinion of independent counsel, to prevent this Trust
Agreement or the Trust from becoming subject to ERISA and to prevent the current
taxation of the Trust to Participants.
ARTICLE VII
GENERAL PROVISIONS
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7.1 Certain Provisions Relating To This Trust Agreement.
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(a) This Trust Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and legal
representatives.
(b) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to any
provisions of such laws regarding choice of laws or conflict of laws.
(c) In the event that 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 to any extent, the
remainder of this Trust Agreement, or the application of such provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each other provision of this
Trust Agreement shall be valid and enforced to the fullest extent permitted by
law.
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<PAGE>
7.2 Notices. Any notice, report, demand or waiver required or permitted
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hereunder shall be in writing and shall be given personally, delivered by
overnight delivery service or sent by telecopier, addressed as follows:
If to the Company:
Newport News Shipbuilding, Inc.
4101 Washington Avenue
Newport News, Virginia 23607-2770
Attention: Treasurer
With a copy to the Company's General Counsel
If to the Trustee:
Wachovia Bank, N.A.
P.O. Box 3099
Winston-Salem, North Carolina 27150
Mail Code NC-31013
Attention: Executive Services Department
Notices shall be effective only upon receipt.
The Company or Trustee may change the address to which notices,
requests and other communications are to be sent to it by giving written notice
of such address change to the other parties in conformity with this Section 7.2
7.3 Gender and Number. Wherever any words are used herein in the
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masculine gender, they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form, they shall be construed as though they
were also used in the plural form in all cases where they would so apply.
Likewise, wherever any words are used herein in the plural form, they shall be
construed as though they were also used in the singular form in all cases where
they would so apply.
7.4 Headings. The headings and subheadings of this Agreement have been
--------
inserted for convenience of reference and are to be ignored in any construction
of the provisions hereof.
7.5 No Third Party Beneficiaries. Nothing in this Trust, express or
----------------------------
implied, is intended to or shall confer on any particular person, other than the
Company and the Trustee, any right, benefit or remedy of any nature whatsoever
under or by reason of this Trust, and no such person shall have any right, title
or interest in or any claim to the Trust Corpus except to the extent expressly
provided in Section 6.1 upon termination of this Trust. In particular, it is
the express intent of the parties that (i) this Trust shall not form part of any
of the Plans, (ii) neither any Plan nor any Participant or Beneficiary shall
have any right, title or beneficial ownership or other interest in or any claim
(preferred or otherwise) to the Trust Corpus, nor shall any such Participant or
Beneficiary have any right to compel, restrain or otherwise direct the exercise
of
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<PAGE>
the respective powers of Trustee and the Company hereunder, it being understood
that the right of each such Participant and Beneficiary shall be determined in
accordance with the provision of Plans and (iii) the Trust Corpus shall not be
deemed to be held under any trust for the benefit of any such Participant or
Beneficiary or to be collateral security for the performance of the obligations
of the Corporation.
7.6 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all of which
together constitute but one instrument, which may be sufficiently evidenced by
any counterpart.
7.7 Directions by Company. Except as otherwise provided herein, all
---------------------
directions by the Company to the Trustee shall be effected by the Chief
Executive Officer, the Chief Financial Officer, any Executive Vice President,
any Senior Vice President, the Treasurer or any Assistant Treasurer. The
Company shall provide to the Trustee signature specimens and an incumbency
certificate with respect to each member of the foregoing group of officers and,
in the absence of actual knowledge to the contrary, the Trustee shall be
conclusively entitled to rely on such certificates as to each such individual's
authority to provide directions to the Trustee hereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
under seal in their respective names by their duly authorized officers the day
and year first above written.
NEWPORT NEWS SHIPBUILDING INC.
By: ss/ D. R. Wyatt
---------------------------------
Name: D. R. Wyatt
Title: Treasurer
WACHOVIA BANK, N.A.
solely in its capacity as trustee under this
Trust Agreement
By: ss/ Joe O. Lens
--------------------------------
Name: Joe O. Lens
Title: Senior Vice President/Group
Executive
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<PAGE>
EXHIBIT A
NEWPORT NEWS SHIPBUILDING INC.
PLANS
Stock Based Plans
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Salaried 401(K)
Employee Stock Purchase Plan
NNS Inc. Stock Ownership Plan
1998 NNS Inc. Stock Incentive Plan
1997 Stock Plan for Directors of NNS
Employment Agreements
Salaried Pension
Hourly Pension Plans
Non-Stock Based Plans
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NNS Change in Control Severance Benefit Plan for Key Executives
Salaried Pension
NNS Deferred Compensation Plan
NNS Deferred Compensation Plan for Non-Employee Directors
Hourly Medical
Salaried Medical
NNS Annual Incentive Plan
Salaried Prescription Drug
Salaried Short Term Disability
Employment Agreements
Hourly Target Benefit Plan
Salaried Dental
Salaried Basic Life Insurance
Salaried Long Term Disability
Hourly Retiree Pharmacy Program
Hourly Medicare Premium Reimbursement - Part B
Salaried Mental Health
Salaried Medicare Premium Reimbursement
Hourly Sickness and Accident
Hourly Life Insurance
Salaried Retiree Pharmacy Program
Salaried COBRA & Billing
Hourly Employee Assistance Program
Salaried Flexible Spending Accounts
Hourly Paid-Up Life Insurance
Salaried Employee Assistance Program
Salaried Specialty Provider Program
Hourly Travel Accident Insurance
Salaried Vision
<PAGE>
Salaried Survivor Support
Salaried Travel Accident
Hourly Discount Vision
Hourly Survivor Support
Hourly Accidental Death and Dismemberment
Hourly Funeral Leave
Hourly Holiday Pay
Hourly Jury Duty
Hourly Long Service Award
Hourly Pension Plans
Hourly Pre-Paid Legal
Hourly Tuition Reimbursement
Hourly Vacation
Salaried AD&D Insurance
Salaried Dependent Life
Salaried Discount Vision Plan
Salaried Funeral Leave
Salaried Holiday Pay
Salaried Jury Duty
Salaried Long Service Award
Salaried Pre-Paid Legal
Salaried Severance Pay
Salaried Supplemental AD&D
Salaried Supplemental Life Insurance
Salaried Tuition Reimbursement
Salaried Vacation
