Case KRH Doc 3096 Filed 07/19/16 Entered 07/19/16 17:44:28 Desc Main Document Page 1 of 25

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1 Document Page 1 of 25 ALPHA NATURAL RESOURCES NON-UNION RETIREE VEBA TRUST Preamble This TRUST AGREEMENT ( T r u s t A g r e e m e n t )is made and entered into as of the VEBA Effective Date, by and among the following (collectively the Parties ): the Retiree Committee; the VEBA Board; and US Bank National Association, a national banking association organized under the laws of the United States with offices in Minneapolis, Minnesota ( Fund Trustee ). Introduction (1) On the Petition Date, Alpha filed b a n k r u p t c y petitions w i t h t h e C o u r t i n t h e A l p h a B a n k r u p t c y C a s e ; (2) As of the Petition Date, Alpha provided certain non-pension benefits to certain Non-Union-Retirees in the form of (1) subsidies under the Alpha Natural Resources LLC and Affiliates Retiree Medical Plan and Alpha Natural Resources Retiree Medical Limited Health Reimbursement Account HRA ( Medical Subsidies ) and (2) supplemental monthly subsidies to certain non-union retirees and spouses who took part in the Voluntary Retirement Program ( VRP Subsidies and, together with the Medical Subsidies, collectively, the Retiree Benefits ), as described in greater detail in the plan documents thereof; (3) On November 3, 2015, Alpha filed a certain Motion of the Debtors, Pursuant to Section 363 of the Bankruptcy Code, For an Order Authorizing Debtors to Terminate Certain Unvested Non-Pension Benefits (Docket No. 799) ( Retiree Benefits Motion ) requesting authority to reduce or eliminate the provision of the Retiree Benefits and certain other benefits to its Non-Union Retirees in the ordinary course of business in accordance with the terms of the applicable governing documents thereof; (4) Certain Non-Union Retirees then filed a Motion to Appoint Official Retiree Committee Pursuant to 11 U.S.C (Docket No. 868), and, by an order entered on November 19, 2015 (Docket No. 970), the Court granted the relief requested therein and directed the appointment of the Retiree Committee pursuant to 1114 of the Code to represent the Non-Union Retirees who were receiving or were eligible to receive the Retiree Benefits from Alpha; (5) On July 7, 2016, the Court verbally approved the Second Amended Joint Plan of Reorganization of Debtors and Debtors in Possession ( Reorganization Plan ); (6) On July 12, 2016, the Court entered an Order Confirming the Reorganization Plan (Docket No. 3038) ( Confirmation Order ); 1

2 Document Page 2 of 25 (7) On July 15, 2016, the Court entered the Agreed Order; (8) The Retiree Committee, Alpha, and the First Lien Agent resolved their differences, as reflected in the Agreed Order and Confirmation Order, whereby, in material part, Alpha and the First Lien Agent were relieved of any obligation to provide the Retiree Benefits for the Non-Union Retirees in return for providing certain funding specified in the Agreed Order to a VEBA trust required by the Agreed Order to be created and administered by the Retiree Committee and/or a designee thereof; (9) The First Lien Lenders in the Alpha Bankruptcy Case, in accordance with an order entered by the Court in the Alpha Bankruptcy Case, formed a new entity to acquire the Core Assets of Alpha ( NewCo ); (10) On July 15, 2016, the Retiree Committee filed its Motion to (a) Approve the Creation of a VEBA, (b) Authorize Possession of Funds, (c) Authorize Assignment/Transfer of Rights, and (d) Grant Related Relief (Docket No. 3061) ( VEBA Motion ), and on July, 2016 the Court entered a Order (Docket No. ) in response thereto ( VEBA Order ); (11) Pursuant to the Retiree Orders, the Retiree Committee has authorized and mandated the creation of the VEBA Board in order to establish and administer the VEBA to provide the VEBA Benefits solely for the benefit of the Intended Beneficiaries; (12) The First Lien Agent, on behalf of the First Lien Lenders and NewCo, has agreed in the Agreed Order and Confirmation Order that NewCo will, in accordance with a payment schedule in the Agreed Order, make certain contributions at various times in various amounts to the VEBA Trust in order to fund the VEBA Benefits ( Contributions ); (13) Pursuant to the Retiree Orders, the VEBA Trust shall enable the VEBA Board to provide the VEBA Benefits through the VEBA Plan as set forth herein and in the VEBA Plan, with the obligation and discretion to determine and modify the VEBA Benefits provided by the VEBA Trust; (14) The m embers o f the VEBA Board a r e willing to enter into this Trust Agreement i n o r d e r to establish the VEBA T rust for the purposes of providing the VEBA Benefits; (15) T h e intention of the Parties is that this VEBA qualify as a single employer employee welfare benefit plan under the applicable provisions of ERISA which is exempt from income taxation under IRC 501(c)(9). NOW, THEREFORE, in accordance with the Retiree Orders, the Parties hereby establish this VEBA Trust upon the following terms and conditions: 2

3 Document Page 3 of 25 Article I Definitions The following bold and capitalized words and phrases shall have the meaning set forth below when used in this Trust Agreement: Agreed Order means that certain Stipulation and Agreed Order A m o n g t h e D e b t o r s, t h e R e t i r e e C o m m i t t e e a n d t h e F i r s t L i e n A g e n t ( D o c k e t N o. 3051) that was e n t e r e d by the Court in the Alpha Bankruptcy Case on July 15, 2016, which Agreed Order approved the Stipulation and Agreed Order A m o n g t h e D e b t o r s, t h e R e t i r e e C o m m i t t e e a n d t h e F i r s t L i e n A g e n t a s i n d i c a t e d i n t h e Notice of Proposed Stipulation and Agreed Order A m o n g t h e D e b t o r s, t h e R e t i r e e C o m m i t t e e a n d t h e F i r s t L i e n A g e n t ( D o c k e t N o ). Alpha means, collectively, Alpha Natural Resources, Inc. and certain of its direct and indirect subsidiaries. Alpha Bankruptcy Case means Case No (KRH) (Jointly Administered), a s filed with the Court under the Code by Alpha as debtors and debtors-in-possession for relief under Chapter 11 of the C o d e. Code means the applicable provisions of the United States Bankruptcy Code, 11 U.S.C Confirmation Order has the meaning provided in (6) of the Introduction. Contributions has the meaning provided in (12) of the Introduction. Court means the United States Bankruptcy Court for the Eastern District of Virginia. Eligible Beneficiaries means those Intended Beneficiaries who the VEBA Trustees determine to be eligible to actually receive VEBA Benefits under the VEBA Plan. ERISA means the Employee Retirement Income Security Act, as presently of hereafter amended, and the regulations promulgated thereunder by the Employee Benefits Security Administration of the United States Department of Labor. Exhibit A has the meaning specified in Section 1 of Article II of this Trust Agreement. Exhibit B has the meaning specified in Article III of this Trust Agreement. First Lien Agent means Citicorp North America, Inc., as administrative and collateral agent 3

4 Document Page 4 of 25 under Alpha s prepetition first lien secured credit facility in the Alpha Bankruptcy Case. First Lien Lenders has the same meaning as such term as used in the Agreed Order. Fund Trustee means the institutional trustee of the VEBA Trust selected by the Retiree Committee and identified in the Preamble, as well as any successor thereto appointed from time to time by the VEBA Trustees in accordance with the terms of this Trust Agreement which is a bank or other financial institution having trust powers, to hold, manage and invest the Trust Fund under and in accordance with this Trust Agreement. Intended Beneficiaries means those Non-Union Retirees who were receiving, or had fulfilled all necessary requirements to receive, Retiree Benefits as of the Reorganization Effective Date and whose Retiree Benefits (or eligibility for such Retiree Benefits) were modified or terminated through the A l p h a Bankruptcy Case. Intended Beneficiaries is further defined, for purposes of avoidance of any question, to include only those dependents, spouses and/or surviving spouses of such Non-Union Retirees that were also eligible for or were receiving Retiree Benefits as of the Reorganization Effective Date. IRC means the Internal Revenue Code of 1986, as presently or hereafter amended, and the regulations issued thereunder by the Internal Revenue Service of the United States Department of the Treasury. Medical Subsidies has the meaning provided in (2) of the Introduction. NewCo has the meaning provided in (9) of the Introduction. Non-Union Retirees means, collectively, the non-union former employees and retirees of Alpha and their eligible spouses, surviving spouses and eligible dependents, as of the Petition Date. Participant is a n Eligible Beneficiary who elects into participation in the VEBA Plan. The Participants shall be the beneficiaries of the VEBA Trust and, excluding participating souses, surviving spouse and eligible dependents, the members of the VEBA under IRC 501(c)(9). Parties has the meaning provided in the Preamble. Petition Date means August 3, Reorganization Effective Date means the effective date of the Reorganization Plan. Reorganization Plan has the meaning provided in (5) of the Introduction. Retiree Benefits has the meaning provided in (2) of the Introduction. Retiree Benefits Motion has the meaning provided in (3) of the Introduction. 4

5 Document Page 5 of 25 Retiree Committee is that certain official committee of retired employees appointed by the Court in the Alpha Bankruptcy Case pursuant to the Order Directing Appointment of Committee of Retired Employees dated November 19, 2015 (Docket No. 970) entered in accordance with 1114 of the Code. Retiree Orders means, collectively, the Agreed Order, the Confirmation Order, and the VEBA Order. Third-Party Administrator means any entity or persons appointed by the VEBA Board to administer the VEBA Benefits pursuant to the VEBA Plan. Trust Agreement has the meaning provided in the Preamble. Trust Fund means and includes any funds and assets of the VEBA received or held, in trust, by the VEBA Trust under the control and management of the Fund Trustee, whether or not increased or decreased by investment earnings (or losses) thereon, to be used for the provision of the VEBA Benefits and payment of the administration expenses of the VEBA. VEBA means the voluntary employee beneficiary association within the meaning of 501(c)(9) of the IRC, which is composed of both the VEBA Plan and the VEBA Trust and is established pursuant to this Trust Agreement. VEBA Benefits means those certain retiree welfare benefits described in and to be provided by the VEBA Plan for the Participants. VEBA Board means, collectively, those certain individuals named in Article XI hereof, as duly initially appointed by the Retiree Committee, as well as their successors as appointed or elected from time to time pursuant to the terms of this Trust Agreement, acting collectively as the Board of Trustees of the VEBA, to control and manage the operation, overall design and administration of the VEBA Plan and VEBA Trust in accordance with the terms and provisions of the VEBA Plan and this Trust Agreement. The VEBA Board shall be both the plan administrator and the named fiduciary of the VEBA Plan for purposes of ERISA. VEBA Effective Date means the date on which the VEBA Trust is funded in any amount following the execution of this Trust Agreement by the last of the Parties. VEBA Motion has the meaning provided in (10) of the Introduction. VEBA Plan means the Alpha Natural Resources Non-Union Retiree VEBA Plan, which is an employee welfare benefits plan, as defined by ERISA 3(1), established by the V E B A Board and forming a part of the VEBA, pursuant to the plan document of the VEBA Plan as adopted by the VEBA Board and as may be amended from time to time in accordance therewith, to provide the terms and conditions with respect to the VEBA 5

6 Document Page 6 of 25 Benefits. VEBA Order has the meaning provided in (10) of the Introduction. VEBA Trust means the trust created pursuant to this Trust Agreement in accordance with the Retiree Orders as part of the VEBA for the purpose of holding and investing the funds and assets of the VEBA, as required by both ERISA and IRC 501(c)(9). VEBA Trustee means an individual member of the VEBA Board, as well as any successor trustees thereof appointed in accordance with Article XI hereof of this Trust Agreement. The terms VEBA Trustees and VEBA Board may be used interchangeably and shall have the same force and effect. VRP Subsidies has the meaning provided in (2) of the Introduction. Article II Creation of Trust and Purpose 1. There is hereby created and established the Alpha Natural Resources Non-Union Retiree VEBA Trust. The situs of the Trust shall be located i n t h e S t a t e o f and shall have such address as the VEBA Board shall establish from time to time. The VEBA Board may modify the situs of the VEBA Trust as it sees fit and prudent. The name and address for the initial registered agent of the VEBA Trust is reflected in Exhibit A attached hereto, incorporated herein by reference, and expressly made a part hereof as if fully copied herein. 2. It is intended that this VEBA shall qualify as a tax- exempt voluntary employees' beneficiary association under IRC 501(c)(9) which is also an employee welfare benefit plan under ERISA 3(1), and the VEBA shall at all times be interpreted, construed, administered and operated in good faith in accordance with IRC 501(c)(9) and ERISA and otherwise in a manner designed to effectuate this intention. 3. The purpose of the VEBA Trust is to provide monetary relief in the form of the VEBA Benefits to the Eligible Beneficiaries. 4. For a targeted period of years, the VEBA Trust shall be managed to provide the VEBA Benefits in the form of continued subsidies at some level to the Participants V R P S u b s i d i e s a n d / o r s u b s i d i e s for qualified health insurance premiums. The VEBA Benefits shall be similar in purposes and type to the Retiree Benefits, but the actual type and level of VEBA Benefits, as well as the Eligible Beneficiaries thereof, shall be determined by the VEBA Board, in their discretion, but taking into account the recommendations of the Retiree Committee. The VEBA Benefits shall be provided for so long as economically practicable, which may be effected by factors such as material changes in circumstances, changes in health care law legislation, IRS taxation rules, the number of Participants and the amount of VEBA Benefits 6

7 Document Page 7 of 25 expected to be paid and actually paid from time to time, the potential receipt of Contributions from NewCo to fund the Trust Fund, or the like. The VEBA Board shall have the discretion to provide a different manner of equitably determining the Eligible Beneficiaries and the VEBA Benefits which will be provided thereto, both upon the Trust Effective Date and subsequently upon a change in circumstance such that the VEBA Board determines, in its sole discretion and in the good faith exercise of its reasonable judgment, that VEBA Benefits should or must be provided to a class of Eligible Non-Union Retirees less than the Eligible Beneficiaries and in a different manner than the Retiree Benefits in order to carry out, and without altering the intended purpose of, the VEBA Trust. The actual decisions of the VEBA Board with respect to the determinations authorized by this 4 of this Article II shall be explained in detail in the VEBA Plan. 5. In furtherance of Section 4 of this Article II, the Parties expressly recognize and agree that: (a) (b) The Contributions are not intended to be, and likely will not be, adequate either to provide the VEBA Benefits at the same level as the Retiree Benefits or to provide an equitable level of VEBA Benefits to the entire class of Intended Beneficiaries. The VEBA Board shall initially determine the Eligible Beneficiaries and shall initially, and at least annually thereafter, determine the VEBA Benefits to be paid to the Participants during the applicable coverage period, which determination shall be described in detail in the plan document of the VEBA Plan. The VEBA Board shall, in making these determinations, take into account such factors as the number of initial Participants, present and anticipated amount and timing of Contributions, expected number of Participants in future years, and such other factors as shall be deemed reasonable and necessary in order to provide a reasonably consistent level of VEBA Benefits as possible to each Participant for a target period of ten (10) years or otherwise until exhaustion of the Trust Fund. Article III Acceptance of Trust The Fund Trustee hereby accepts the capacity of, agrees to serve as, and shall be the trustee of the Trust Fund. The Fund Trustees accepts the trust relationship hereby created and covenants to hold or to direct the holding of all cash and other property which it may receive hereunder upon the terms of and in accordance with the conditions hereinafter set forth. The Fund Trustee also hereby acknowledges receipt, IN TRUST, of the initial contribution to the VEBA Trust in order to establish the Trust Fund in the amount specified in Exhibit B attached hereto, incorporated herein by reference, and expressly made a part hereof as if fully copied herein. Article IV Eligibility for Benefits 1. The Trust Fund is to benefit only the Participants. 2. Any and all determinations of the term "Eligible Beneficiaries" and any and all 7

8 Document Page 8 of 25 i n i t i a l determinations and/or s u b s e q u e n t modification(s) of the term Participant shall be solely and exclusively the responsibility of the VEBA Board in the exercise of their discretion in accordance with the terms of this VEBA and this Trust Agreement. In any such decisions the VEBA Boar shall be bound by a reasonable interpretation of the purposes of this VEBA Trust. Article V Contributions and Funding 1. Contributions: In accordance with the Confirmation Order, the VEBA Trust shall be funded by Contributions from NewCo and all such Contributions into or for the benefit of the Trust Fund shall be irrevocable. NewCo Contributions to the Trust F und shall be made as provided in the Agreed Order and the Confirmation Order. Upon the discretion of the V E B A Board, all Contributions so received, together with the income therefrom (if any) and any other increments thereon, shall be held, invested, reinvested and administered i n t h e T r u s t F u n d by the Fund Trustee pursuant to the terms of this Trust Agreement, without distinction between principal and income. The VEBA Board, in consultation with the Retiree Committee (as long as it shall be active), shall have the enforcement power to require NewCo, or any entity to which NewCo and/or the First Lien Agent has assigned or otherwise transferred the obligations to make payment of the Contributions, to make or cause to be made the Contributions to the VEBA Trust in accordance with the terms of the Agreed Order and the Confirmation Order. 2. Investment Guidelines: It is initially the case that because monies coming into the VEBA Trust will be required to be disbursed in relatively short time frames, due to the instability of the general economic marketplace and worldwide economics, there shall be no requirement that the Fund Trustee invest any Trust Funds to avoid attendant risks. However, in the event that it deems it advisable in the future to do so, the VEBA Board shall then adopt investment guidelines governing the investment of the Trust Fund. All such investments shall be consistent with ERISA and any other applicable laws and regulations. 3. No Reversion or Prohibited Inurnment: No part of the VEBA Trust or Trust Fund shall revert to or inure to the benefit of any organization or individual other than through the payment of the VEBA Benefits to Participants and reasonable administration expenses of the VEBA. 1. General Duties of Fund Trustee: Article VI Fund Trustee (A) The Fund Trustee shall hold, manage, invest and reinvest the Trust Fund as described herein. The Fund Trustee does not guarantee the solvency of the VEBA Trust; (B) Participants, and The Fund Trustee shall discharge its duties solely in the interest of the 8

9 Document Page 9 of 25 (i) for the exclusive purpose of providing t h e V E B A Benefits and defraying the expenses of administering the VEBA in keeping with the purpose of the VEBA Trust; (ii) with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; and ERISA. (iii) in accordance with this Trust Agreement, IRC 501(c)(9), and 2. Investment Powers of Fund Trustee: The Fund Trustee is authorized and empowered: (A) To invest and reinvest the Trust Fund and any accretions thereto, without distinction between principal and income, in such securities or in such other property, real or personal, wherever situate, whether or not income producing, including but not limited to stock, common or preferred, interests in regulated investment companies bonds and mortgages, and other evidences of indebtedness, and deposits in a bank or other financial institution under state or Federal supervision, which bear a reasonable rate of interest. In making such investments, the F u n d Trustee shall not be restricted by any state law or state statute designating investments eligible for trust funds unless constrained or governed by ERISA. (B) The Fund Trustee may not receive direct or indirect (other than through routine trustee s fees) consideration for any investment or investment decision made on behalf of the VEBA Trust. (C) The Fund Trustee is further empowered: (i) To hold un-invested, from time to time, without liability for interest thereon, such amounts as are deemed necessary and/or prudent for the cash requirements of the VEBA Trust, and to keep such portion of the Trust Fund in cash or cash balances (and/or other liquid instruments, or Certificates of Deposit) as the Fund Trustee may from time to time deem to be in the best interests of the Trust Fund; (ii) To utilize a general disbursement account, i.e., in the form of a demand deposit and/or time deposit account, for distributions from the VEBA Trust, without incurring any liability for payment of interest thereon; (iii) To provide the Third-Party Administrator with direct access, withdrawal authority and/or the right to utilize funds in any such general disbursement accounts necessary for the Third-Party Administrator to carry out its responsibilities; and (iv) To hold assets of the VEBA Trust in cash or equivalents, government securities, or straight debt securities in varying proportions when and for so long as, in the opinion of the Fund Trustee, prevailing market and economic considerations indicate that it is in the best interest of the VEBA Trust to do so. 9

10 Document Page 10 of 25 (D) Notwithstanding the foregoing, in no event shall the F u n d Trustee make any investment prohibited by ERISA. Further, the Fund Trustee: (i) shall not allow investment by the Trust Fund, directly or indirectly, into nor allow the use of derivatives or futures contracts, except in a collective investment vehicle that does not employ derivatives or futures contracts as a principal part of its investment strategy; and (ii) shall not invest in investment funds exempt from registration under the Investment Company Act of 1940 by reason of 3(c)( 1) or (3)(c)(7) that utilize leverage or long short strategies. 3. Powers of Fund Trustee: The Fund Trustee shall be further authorized and empowered, in its discretion, to exercise any and all of the following rights, powers and privileges with respect to the VEBA Trust: (A) To register any investment held in the VEBA Trust in its own name or in the name of one or more of its nominees and to hold any investment in bearer form or other negotiable form, to utilize the services of a depository clearing corporation (such as the Depository Trust Company) to the extent permitted by law, and to combine certificates representing such investments with certificates of the same issue held by the Fund Trustee in other fiduciary capacities, but the books and records of the Fund Trustee shall at all times show that all such investments are part of the VEBA Trust. (B) In compliance herewith, the Fund Trustee may give to any registrar, transfer agent, or insurer, including but not limited to corporations, state, or Federal authorities or agents, any bond or other guarantee which may be required, provided the Fund Trustee shall be exempt to the maximum extent permissible by applicable law from any need to post a bond. Any registrar, transfer agent, or insurer shall be indemnified by the VEBA Trust and held harmless from any action either at law or in equity for acting upon or in compliance with the instructions received in writing from the Fund Trustee, unless the damages, liability, costs, expenses or claims arise from the other party's negligence or willful misconduct. (C) To vote upon any stocks, bonds or other securities; to give general or special proxies or powers or attorney with or without power of substitution; to exercise any conversion privileges, subscription rights, or other options, and to make any payments incidental thereto; to oppose or to consent to, or otherwise participate in, corporate reorganizations or other changes affecting corporate securities, to delegate discretionary powers, and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities, or other properties held as part of the VEBA Trust. (D) To make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to carry out the powers herein granted. In addition to the foregoing powers, the Fund Trustee shall also have all of the powers, rights and privileges conferred upon trustees by the fiduciary law of the State of to 10

11 Document Page 11 of 25 the extent such law is not preempted by Federal law, and the power to do all acts, take all proceedings, and execute all rights and privileges, although not specifically mentioned herein, as the Fund Trustee may deem necessary to administer the Trust Fund and to carry out the purposes of this VEBA Trust. 4. Authority of Fund Trustee: Persons shall be under no obligation to ascertain the power and authority of the Fund Trustee to make any sale, transfer, assignment, or investment of the whole or any part of the VEBA Trust at any time held hereunder, or to make any contract in relation thereto, nor shall any insurance company be required to ascertain the power or authority of the Fund Trustee to apply for and purchase any insurance or annuity contract, and any such person or company may rely upon any factual information furnished by the F u n d Trustee in connection therewith. All parties dealing with the Fund Trustee with respect to the VEBA Trust shall have the right to assume that the Fund Trustee has full power and authority in all respects to deal with the VEBA Trust, and no purchaser shall be required to see to the application of the purchase money. 5. Fund Trustee s Compensation and Expenses and Taxes: The Fund Trustee shall be paid from the VEBA Trust such an amount and at such time or times as shall be agreed in advance and in writing from time to time between the VEBA Board and the Fund Trustee, which amount shall be both for the Fund Trustee s compensation for its services in administering the Trust Fund and for its incurred expenses related thereto.. All taxes of any kind and all kinds whatsoever that may be levied or assessed under existing or future laws upon, or in respect of, the VEBA Trust or its income, shall be paid from the VEBA Trust. Article VII Distributions and Disbursements 1. Authority regarding distributions and reporting: The VEBA Board is authorized to make disbursements from the VEBA Trust to pay the reasonable expenses associated with the creation, maintenance or revisions to the VEBA, including but not limited to the Fund Trustee and to reimbursement (or direct payment) of the costs and fees to retain and utilize actuaries, consultants, attorneys, accountants and other professionals utilized by the VEBA Trust. The V E B A B o a r d shall maintain and/or cause to be maintained descriptions of all fees and expenses paid and/or incurred by the VEBA Trust. 2. Payment for VEBA Benefits: The Fund Trustee will cause payments from the Trust Fund to be utilized to pay VEBA Benefits under the VEBA Plan. 3. Delegation of Authority: Written directions from a person who has been authorized in writing by the VEBA Board to act as an agent for the VEBA Trust shall be treated as directed by the Fund Trustee with respect to such matters as are within the scope of authority that VEBA Board has delegated to such designated agent. Article VIII Trust Accounts 11

12 Document Page 12 of Right to Set Up Separate Accounts: The Fund Trustee shall have the right, but not the obligation, to allocate the assets within the Trust Fund for accounting purposes, and to establish separate accounts, or otherwise to better effectuate or administer the Trust Fund, as determined in the sole discretion of the Fund Trustee. The Trust Funds allocated to such accounts and sub-accounts may be commingled for investment purposes. The Fund Trustee may further eliminate one or more accounts and transfer funds between accounts as needed to prudently manage the Trust Fund. 2. Record Maintenance: The Fund Trustee shall keep or cause to be kept accurate and detailed accounts with respect to the assets constituting the Trust Fund, including but not limited to, records with respect to contributions to the T r u s t Fund, disbursements from the Trust Fund, the purchase or sale of assets, the cost and fair market value of assets retained, and the income, gain or loss derived periodically from the investments held in the Trust Fund. All related books and records maintained by the Fund Trustee and/or related information and documents shall be open to inspection by any and all individual members of the VEBA Board. Nothing herein, however, should be construed to require any recordkeeping beyond that required by ERISA. 3. Designation of Additional F u n d Trustees: The VEBA Board may designate additional Fund Trustees (with some or all Fund Trustee powers enumerated herein) to act hereunder. 4. Documents Evidencing Trusteeship: In the event any additional Fund Trustee is appointed, is removed or resigns, any such appointment, removal or resignation must be in writing. Article IX Protection of the VEBA Trustees 1. Indemnification: No person who serves as a VEBA Trustee shall be personally liable for any good faith act taken or omitted, nor for an act taken or omitted by any agent, employee, attorney, or service provider selected with reasonable care, nor for any act taken or omitted without his or her knowledge or consent by any other V E B A Trustee who serves on the VEBA Board, nor for any loss incurred through investment of the VEBA Trust or failure to invest, provided however, that nothing herein shall relieve a fiduciary from responsibility or liability of responsibility, obligation or minimum duties imposed by ERISA. 2. The VEBA Board and the VEBA Trustees (as a group and individually) shall be indemnified and held harmless by the VEBA Trust from and against any and all liability to which the VEBA Board and/or individual V E B A Trustees may be subjected as a result of this Trust Agreement, including all fees and expenses reasonably incurred in its defense or in the defense of individual VEBA Trustees, except to the extent the damages, liability, costs, expenses or claims directly arise from gross negligence or willful misconduct or to the extent prohibited by ERISA. The indemnification provided to the V E B A Trustees hereunder shall also apply to any liability arising from the acts or omissions of any predecessor trustee or other fiduciaries of the VEBA Trust. 12

13 Document Page 13 of 25 (A) In the event that a VEBA Trustee or VEBA Trustees are named as defendants in a lawsuit or proceeding involving the VEBA Trust or VEBA Plan, said VEBA Trustee(s) shall be entitled to receive on a current basis indemnity payments provided for under this Article IX; provided, however: if a final judgment entered in the lawsuit or proceeding holds that the VEBA Board is/are guilty of gross negligence or willful misconduct or that a VEBA Trustee has breached his or her fiduciary responsibility under ERISA with respect to the VEBA Plan or the VEBA Trust, such person or persons shall be required to refund the indemnity payments that he or she has received. Article X Right to Amend or Terminate 1. Termination: This VEBA Trust shall continue for such time as it is necessary and practicable to accomplish the purpose for which it was created. The VEBA Trust and/or any welfare plan of the VEBA Plan may be terminated by the VEBA Board if and only if the goals of the VEBA Trust and/or the VEBA Plan can no longer be effectuated economically, and/or if the costs of maintaining the VEBA Trust and/or VEBA Plan outweigh the benefits of maintaining same, or otherwise if the VEBA Board in its reasonable judgment determines that continuing the VEBA Trust and/or VEBA Plan is not in the best interests of the Participants. 2. Liquidation: Upon termination of the VEBA Trust, the Fund Trustee shall hold the Trust Fund until completely exhausted by paying V E B A Benefits p u r s u a n t t o S e c t i o n 1 o f t h i s A r t i c l e X and paying the reasonable expenses of the VEBA Trust, including expenses involved in the termination. Any remaining assets which are not needed to discharge VEBA Trust liabilities shall be distributed to or for the benefit of the then Participants in accordance with the allocation of VEBA Benefits as previously administered and pursuant to the reasonable judgment of the VEBA Trustees in such another equitable manner determined at the sole discretion of the VEBA Board but in accordance with the applicable requirements of IRC 501(c)(9) and/ or ERISA, including but not limited to any future payment made by NewCo to the VEBA Trust thereafter. 3. Right to Amend: The VEBA Board may amend, in whole or in part, the provisions of this Trust Agreement, specifically including, but not limited to, any amendments hereto as may be required by the Internal Revenue Service in connection with the VEBA Trust s qualification for tax-exemption under IRC 501(c)(9); provided, however, that no such amendment may permit any part of the VEBA Trust to be used for or diverted to purposes inconsistent with those expressed herein or which are in violation of any applicable provisions of IRC 501(c)(9) or ERISA. Further, the VEBA Board may not modify Article IX herein to lower the threshold of VEBA Board culpability. Article XI Procedures for VEBA Board 1. Composition of V E B A Board: The VEBA Board shall be comprised of at least three (3) members, and may be comprised of more members as decided by the VEBA Trustees. 13

14 Document Page 14 of 25 While not prohibited, any VEBA Trustee shall, in a timely manner, fully disclose upon initial appointment (or thereafter) any employment or agency relationship with Alpha, NewCo, or the First Lien Agent or other relationship which could be viewed as a conflict of interest, and a VEBA Trustee shall not vote on any matter which would create a conflict of interest; provided, however, that is recognized that the VEBA Trustees will also likely be Intended Beneficiaries and Participants, and their status as such shall not, by itself, disqualify them from voting on any matter that comes before the VEBA Board, specifically including, but not limited to, determinations of Eligible Beneficiaries and VEBA Benefits therefor. 2. Initial Designation: The initial VEBA Board shall initially consist of the following three (3) named members: (A) (B) (C), Chairperson; ; and. The above identified VEBA Trustees were duly elected and appointed by the Retiree Committee as part of the scope of its duties. The remaining VEBA Trustees may subsequently elect a different Chairperson by a majority vote. 3. Term of Office: There shall be no limit on the length of service with respect to any VEBA Trustees. Each VEBA Trustee shall continue to serve as such until his or her death, incapacity to serve hereunder, resignation or removal. The remaining VEBA Trustees may subsequently elect a different Chairperson by a majority vote. 4. Resignation: A VEBA Trustee may resign, and shall be fully discharged from further duty or responsibility under this VEBA Trust to the extent permitted by law, by giving at least thirty (30) days' advance written notice to the VEBA Board (or such shorter notice as the VEBA Board may accept as sufficient) stating a date when such resignation shall take effect. Such resignation shall take effect on the date specified in the notice or, if a successor VEBA Trustee has been appointed effective as of an earlier date, on such earlier date. The VEBA Trustees shall use reasonable efforts to ensure that no resignations are less than 120 days apart. The death or permanent incapacity of a VEBA Trustee shall constitute a voluntary resignation of said VEBA Trustee. 5. Removal: As long as there is a quorum (as defined herein), a VEBA Trustee may be removed at any time, with or without cause, by the majority vote of the VEBA Trustees. Any VEBA Trustee may seek a vote to remove any other VEBA Trustee by providing at least fifteen (15) days written notice to the entire VEBA Board. 6. Successor VEBA Trustees: (A) If a VEBA Trustee dies, becomes incapable of acting hereunder, resigns, or is removed, the remaining VEBA Trustees shall appoint a successor VEBA Trustee. 14

15 Document Page 15 of 25 (B) Each successor VEBA Trustee shall signify his or her acceptance of the appointment in writing. (C) If no appointment of a successor VEBA Trustee is made within a reasonable time after the resignation or removal of a VEBA Trustee, a court of competent jurisdiction may, upon application by any remaining VEBA Trustees, appoint a successor VEBA Trustee to the VEBA Board as such court may deem suitable and proper. (D) The VEBA Board may further engage in efforts to seek out, identify, interview and educate third persons as alternative and/or replacement designates for VEBA Trustees that resign and/or are removed. Such designates, if approved by a majority of the VEBA Board, may be invited to VEBA Board meetings. The VEBA Board is further authorized to provide reimbursement of reasonable and necessary expenses incurred by the VEBA Board and/or perspective new VEBA Trustee in this process. The purpose of this sub-paragraph (D) is solely to provide a mechanism for the VEBA Board to seek and maintain continuity of its membership and to provide for a more orderly process with respect to the replacement of VEBA Trustees that resign and/or that are removed with successors already cognizant of the business of the VEBA Board. 7. Meetings: (A) The VEBA Board may establish rules from time to time for the transaction of its business. The VEBA Board may appoint, in writing, committees with such powers as the VEBA Board shall determine, may authorize one or more of their number or any agent to execute or deliver any instrument or make any payment on behalf of the VEBA Board and may, at the expense of the VEBA Trust, retain counsel, employ agents and independent contractors and obtain clerical, medical, actuarial, legal and/or accounting services as the VEBA Board may deem advisable to carry out its duties. In addition, the VEBA Board may designate certain ministerial VEBA functions to one or more persons or institutions pursuant to a written agreement formally expressing the nature of such function(s) and the limitations of any such grant of authority to act on behalf of the VEBA Board. (B) The VEBA Board shall hold meetings as frequently as is necessary to ensure the efficient administration of the VEBA Trust and the VEBA Plan, but not less than two (2) meetings (in person or by telephone) during each calendar year. The Chairperson, or any two (2) VEBA Trustees, may call a special meeting of the VEBA Board by giving at least four (4) days' advance written notice of the time and place thereof to all other VEBA Trustees, provided the meeting is telephonic or has capacity for telephonic participation. Regularly scheduled meetings need not be noticed in writing. (C) One VEBA Trustee, or another individual so designated by the VEBA Board, shall maintain minutes of all VEBA Board meetings, but such minutes need not be verbatim. Copies of such minutes shall be provided to all VEBA Trustees and to such other parties as the V E B A Board may designate. 15

16 Document Page 16 of Written Notice: To reduce unnecessary formality, cost and/or time, any requirements of "writing" within this Article XI of this Trust Agreement (and only within this Article of thi s Trust Agreement) may be effectuated by electronic mail provided all VEBA Trustees have reasonable access to electronic mail. 9. Quorum: A majority of the VEBA Trustees then in office shall constitute a quorum for the purpose of transacting any business. 10. Vote of VEBA Trustees: (A) Each VEBA Trustee shall have one vote. Except as otherwise specified in this Trust Agreement, all actions of the VEBA Board shall be by majority vote of those present or voting by proxy. Notwithstanding the foregoing, any VEBA Trustee having a material conflict of interest of any kind shall not be entitled to vote with respect to any such issue. (B) The vote of any absent VEBA Trustee may be cast by proxy but said proxy shall be evidenced in writing, although it need not be writing in any prescribed form, i.e. to avoid unnecessary formality there is no required proxy form. (C) In addition to decisions made at meetings, except as otherwise provided herein, actions may be taken without a meeting by unanimous written consent of the VEBA Trustees. 11. Compensation: VEBA Trustees may be paid a reasonable honorary compensation for their services hereunder. That amount shall initially be set at $ per year (for each VEBA Trustee) and $1, for the VEBA Board Chairperson, to be paid in yearly installments by the VEBA Trust. Compensation may be increased or decreased from time to time as unanimously agreed by the VEBA Board but in no event shall the VEBA Trustees be paid more than that customarily paid to trustees of similarly sized trusts and/or trusts of similar nature, taking into account the trustee services being performed on behalf of the VEBA Trustees by the Fund Trustee. VEBA Trustees shall also be timely reimbursed for reasonable expenses incurred with respect to a VEBA Trustee's activities on behalf of the VEBA Trust and/or VEBA Plan. 12. Reporting: The VEBA Board is required to send at least one report each year to the Participants that, at a minimum, must reflect the general financial status of the VEBA Trust, the identification of the VEBA Trustees, and other VEBA issues that would be of material benefit if communicated to the Participants. The report must further provide an address for Participants to contact the VEBA Board and to inform the Participants that government reports and returns, trust expense itemization and copies of this Trust Agreement will be made available for inspection and review upon reasonable notice. Article XIII Powers and Duties of the VEBA Board 1. General: The V E B A Board shall be responsible for the administration, 16

17 Document Page 17 of 25 amendment and overall operation of the VEBA Trust and the VEBA Plan. Subject to the provisions of this Trust Agreement and applicable laws, the V E B A Board shall have sole, absolute and discretionary authority t o d e t e r m i n e E l i g i b l e B e n e f i c i a r i e s a n d P a r t i c i p a n t s a n d V E B A B e n e f i t s, to adopt such rules and regulations and take all actions that it deems desirable or necessary for the administration of the VEBA, to determine facts relating to participation in the VEBA Plan and VEBA Trust, and to interpret and construe the terms of the VEBA Plan and VEBA Trust. The good faith decisions of the VEBA Board will be conclusive, final and binding on all Intended Beneficiaries, Eligible Beneficiaries and Participants and all other parties to the maximum extent allowed by law. 2. VEBA Benefits: (A) Establishment of VEBA Plan. So long as practicable, the VEBA Board shall establish, administer and/or cause to have administered the VEBA Plan financed through the VEBA Trust. (B) VEBA Plan Must Be In Writing. The VEBA Board may draft and make changes to the VEBA Plan and plan documents to effectuate the purposes and intent of this VEBA Trust. Nothing in any VEBA Plan document shall be interpreted nor drafted to alter the terms of this Trust Agreement. (C) VEBA Benefits. The VEBA Plan shall be drafted to best provide VEBA Benefits to the Intended Beneficiaries in the manner that the VEBA Board determines appropriate and desirable to the extent consistent with the intent and recommendations of the Retiree Committee. V E B A Benefits provided under the VEBA Plan shall be limited to those benefits which are similar in type and nature to the Retiree Benefits and permitted by Section 501(c)(9) of the IRC. (D) Method of Providing VEBA Benefits. The V E B A Plan shall provide for a mechanism for the VEBA Trustees to determine which of the Intended Beneficiaries will be Eligible Beneficiaries; for such Eligible Beneficiaries to elect to participate in the VEBA Plan; for Participants to receive VEBA Benefits from the VEBA Plan; and for the VEBA Board to determine the type and level of the VEBA Benefits. (E) The VEBA Board shall have the broad discretion to the design of the VEBA Plan with respect to d e t e r m i n a t i o n s o f w h i c h I n t e n d e d B e n e f i c i a r i e s s h a l l b e E l i g i b l e B e n e f i c i a r i e s a n d o f b o t h t h e t y p e a n d a m o u n t o f VEBA Benefits to provide each year, allocations between different Participants, and/or any and all other short and/or long term plan design decisions so long as the VEBA Plan (or alterations to same) are consistent with the purpose of the VEBA. 3. Government Reports and Returns: The VEBA Board shall cause to be filed all reports and returns, including but not limited to, any IRS Form 1024, IRS Form 5500, IRS Form 990, and IRS Fors 1094/1095 that are required to be made with respect to the VEBA Trust and the VEBA Plan. 17

18 Document Page 18 of Compromise or Settle Claims: The V E BA Board may settle, compromise, or submit to arbitration any claims, demands, debts, or damage due or owing to or from the VEBA Trust or VEBA Board on such terms and conditions as the VEBA Board may deem advisable; commence or defend suits in any federal or state Court having jurisdiction over a particular matter or legal or VEBA Trust proceedings; and may represent the VEBA Trust in all legal and VEBA Trust proceedings; provided, however, that the VEBA Trustees shall not be obligated to take any action or to appear and participate in any action which would subject it to expense or liability unless it is first indemnified in an amount and manner satisfactory to it, or is furnished with funds sufficient, in its sole judgment, to cover the same 5. Appointment of Third-Party Administrator; Delegation of Authority: The VEBA Board may appoint a Third-Party Administrator to perform any of its administrative functions. The VEBA Board may by written resolution delegate to any one or more VEBA Trustees the authority to act on behalf of the full VEBA Board to the extent set forth in the resolution. 6. Consultation: The VEBA Board may engage or consult with counsel or other advisors, may direct payment of reasonable compensation from the VEBA Trust, and may take or may refrain from taking any action in accordance with or reliance upon the opinion of counsel or such advisors. 7. Reliance on Written Instruments: Each VEBA Trustee shall be fully protected in acting upon any instrument, certificate or paper believed by him or her to be genuine and to be signed or presented by a duly authorized person or persons, and shall be under no duty to make any investigation or inquiry as to any statement contained in any such writing, but may accept the same as conclusive evidence of the truth and accuracy of the statements therein contained. 8. Bonding: The VEBA Trustees shall be bonded in the amount required by Section 412 of ERISA and may be covered by liability insurance in accordance with Section 410(b) of ERISA. To the extent permitted by applicable law, the costs of such bonding and insurance shall be expenses paid using Trust Funds. 9. Exercise of Retiree Committee Rights: The Retiree Committee hereby specifically assigns to the VEBA Trustees, and the VEBA Trustees are hereby authorized to exercise, any and all rights of the Retiree Committee to enforce the terms, provisions, conditions and/or benefits of the Retiree Committee under the Retiree Orders and the Confirmation Order on behalf of the VEBA Trust, the Intended Beneficiaries, and all Participants, specifically including, but not limited to, the right to payment of the Contributions by NewCo or any successor thereto and the right to assistance in the establishment of the VEBA. Article XIV Investment Powers and Duties 1. The VEBA Board shall prudently select and retain the Fund Trustee, taking into account trustees fees and other transaction costs, along with other appropriate considerations. The Fund Trustee shall acknowledge in writing its appointment as a fiduciary of the Trust Fund. 18