SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ___)(1)
American International Group, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
026874-107
(CUSIP Number)
Howard I. Smith
Vice Chairman-Finance and Secretary
70 Pine Street
New York City, NY 10270
Telephone: (212) 230-5050
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 7, 2006
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
(1) This Schedule 13D constitutes Amendment No. 1 to the Schedule 13D on behalf
of Universal Foundation, Inc., dated February 21, 2006 (the "Universal
Foundation 13D"), Amendment No. 1 to the Schedule 13D on behalf of The Maurice
R. and Corinne P. Greenberg Family Foundation, Inc., dated February 21, 2006
(the "Greenberg Foundation 13D"), Amendment No. 3 to the Schedule 13D on behalf
of Maurice R. Greenberg, dated November 23, 2005 (the "Maurice R. Greenberg
13D"), Amendment No. 3 to the Schedule 13D on behalf of Edward E. Matthews,
dated November 23, 2005 (the "Edward E. Matthews 13D"), Amendment No. 5 to the
Schedule 13D of Starr International Company, Inc., dated October 2, 1978 (the
"Starr International 13D"), and Amendment No. 5 to the Schedule 13D for C. V.
Starr & Co., Inc., dated October 2, 1978 (the "CV Starr 13D"). This Schedule
13D constitutes an amendment and restatement of the Universal Foundation 13D,
the Greenberg Foundation 13D, the Maurice R. Greenberg 13D, the Edward E.
Matthews 13D, the Starr International 13D and the CV Starr 13D in their
entirety.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934, as amended (the "Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
SCHEDULE 13D
-------------------------- ------------------------------
CUSIP No. 026874-107 Page 2 of 20 Pages
-------------------------- ------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Maurice R. Greenberg
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a)[X]
(b)[ ]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
- ---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [ ]
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ---------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
2,902,938
SHARES
-------- ---------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
80,948,183
OWNED BY
-------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
2,902,938
REPORTING
-------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
80,948,183
WITH
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
83,851,121
- ---------- ---------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) [X]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
3.2%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
- ---------- ---------------------------------------------------------------------
SCHEDULE 13D
-------------------------- ------------------------------
CUSIP No. 026874-107 Page 3 of 20 Pages
-------------------------- ------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Edward E. Matthews
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a)[X]
(b)[ ]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
PF
- ---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
- ---------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
751,320
SHARES
-------- ---------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
18,667,178
OWNED BY
-------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
751,320
REPORTING
-------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
18,667,178
WITH
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
19,418,498
- ---------- ---------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) [X]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.7%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
IN
- ---------- ---------------------------------------------------------------------
SCHEDULE 13D
-------------------------- ------------------------------
CUSIP No. 026874-107 Page 4 of 20 Pages
-------------------------- ------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Starr International Company, Inc.
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a)[X]
(b)[ ]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
- ---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Panama
- ---------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
308,905,397
SHARES
-------- ---------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
2,593,899
OWNED BY
-------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
308,905,397
REPORTING
-------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
2,593,899
WITH
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
311,499,296
- ---------- ---------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.0%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
CO
- ---------- ---------------------------------------------------------------------
SCHEDULE 13D
-------------------------- ------------------------------
CUSIP No. 026874-107 Page 5 of 20 Pages
-------------------------- ------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
C. V. Starr & Co., Inc.
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a)[X]
(b)[ ]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
- ---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- ---------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
-------- ---------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
42,337,246
OWNED BY
-------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
-------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
42,337,246
WITH
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
42,337,246
- ---------- ---------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) [X]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.6%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
CO
- ---------- ---------------------------------------------------------------------
SCHEDULE 13D
-------------------------- ------------------------------
CUSIP No. 026874-107 Page 6 of 20 Pages
-------------------------- ------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Universal Foundation, Inc.
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a)[X]
(b)[ ]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WK
- ---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Panama
- ---------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
-------- ---------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
2,593,899
OWNED BY
-------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
-------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
2,593,899
WITH
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,593,899
- ---------- ---------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (See Instructions) [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
CO
- ---------- ---------------------------------------------------------------------
SCHEDULE 13D
-------------------------- ------------------------------
CUSIP No. 026874-107 Page 7 of 20 Pages
-------------------------- ------------------------------
- ---------- ---------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Maurice R. and Corinne P. Greenberg Family Foundation, Inc.
- ---------- ---------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions) (a)[X]
(b)[ ]
- ---------- ---------------------------------------------------------------------
3 SEC USE ONLY
- ---------- ---------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WK
- ---------- ---------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
- ---------- ---------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
- ---------- ---------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
0
SHARES
-------- ---------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
381,507
OWNED BY
-------- ---------------------------------------------------
9 SOLE DISPOSITIVE POWER
EACH
0
REPORTING
-------- ---------------------------------------------------
10 SHARED DISPOSITIVE POWER
PERSON
381,507
WITH
- ---------- ---------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
381,507
- ---------- ---------------------------------------------------------------------
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
- ---------- ---------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
<0.1%
- ---------- ---------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
CO
- ---------- ---------------------------------------------------------------------
Item 1. Security and Issuer
This Schedule 13D relates to shares of common stock, par value $2.50
per share (the "Common Stock"), of American International Group, Inc., a
Delaware corporation (the "Issuer"). The address of the principal executive
offices of the Issuer is 70 Pine Street, New York, New York 10270.
Item 2. Identity and Background
(a), (b), (c) and (f): This Schedule 13D is being filed on behalf of
Maurice R. Greenberg, a United States citizen ("Mr. Greenberg"), Edward E.
Matthews, a United States citizen ("Mr. Matthews"), Starr International
Company, Inc., a Panamanian corporation ("Starr International"), C. V. Starr &
Co., Inc., a Delaware corporation ("CV Starr"), Universal Foundation, Inc., a
Panamanian corporation ("Universal Foundation"), and The Maurice R. and Corinne
P. Greenberg Family Foundation, Inc., a New York not-for-profit corporation
(the "Greenberg Foundation", and together with Mr. Greenberg, Mr. Matthews,
Starr International, CV Starr and Universal Foundation, the "Reporting
Persons", and each, a "Reporting Person").
The principal business address and office for Mr. Greenberg is 399
Park Avenue, 17th Floor, New York, New York 10022. The principal occupation of
Mr. Greenberg is serving as a director and Chairman of the Board of each of
Starr International and CV Starr, and as the Chief Executive Officer of CV
Starr. Mr. Greenberg is also a trustee of the C. V. Starr & Co., Inc. Trust
(the "Starr Trust"), and a member, director and Chairman of the Board of The
Starr Foundation.
The principal business address and office for Mr. Matthews is 399 Park
Avenue, 17th Floor, New York, New York 10022. The principal occupation of Mr.
Matthews is serving as Managing Director and a director of Starr International
and a director and President of CV Starr. Mr. Matthews is also a trustee of the
Starr Trust, and a member and director of The Starr Foundation.
Starr International is a holding company that operates in a number of
lines of business, including commercial real estate, owning and operating a
private golf club and maintaining an investment portfolio, including the Common
Stock. Starr International also previously operated a deferred compensation
profit participation plan for the benefit of executives of the Issuer. Starr
International's principal office is Fitzwilliam Hall, Fitzwilliam Place, Dublin
2, Ireland and it also maintains an office at Mercury House - 101 Front Street,
Hamilton HM12 Bermuda. The following are the executive officers and directors
of Starr International, their addresses and their principal occupations:
Name and Address Office Principal Occupation
- ------------------------------- ----------------------------- --------------------------------
Maurice R. Greenberg Chairman of the Board (See above)
Edward E. Matthews Managing Director and Director (See above)
Lawrence Michael Murphy President and Director President of Starr International
Mercury House
101 Front Street
Hamilton HM12
Bermuda
Houghton Freeman Director President, Freeman Foundation
499 Taber Hill Road
Stowe, VT 05672
Howard I. Smith Director Vice Chairman-Finance and
399 Park Avenue, 17th Floor Secretary of CV Starr
New York, NY 10022
John J. Roberts Director Senior Advisor, American
Concordia Farms International Group, Inc.
P.O. Box 703 Easton, MD 21601
Ernest Stempel Director Senior Advisor and Honorary
70 Pine Street, 29th Floor Director, American International
New York, NY 10270 Group, Inc.
Cesar Zalamea Director President and Chief Executive
Suite 1405-7 Officer of Starr International
Two Exchange Square Company (Asia), Limited
8 Connaught Place
Central, Hong Kong
Each of the above officers and directors of Starr International is a
United States citizen except Mr. Zalamea, who is a citizen of the Republic of
the Philippines.
CV Starr is a holding company that operates in a number of lines of
business, including owning a number of insurance agencies and holding an
investment portfolio, including the Common Stock. CV Starr's principal office
is 399 Park Avenue, 17th Floor, New York, New York 10022. The following are the
executive officers and directors of CV Starr, their addresses and their
principal occupations:
Name and Address Office Principal Occupation
- -------------------------- ----------------------------- --------------------------------
Maurice R. Greenberg Chairman of the Board and (See above)
(See above) Chief Executive Officer
Howard I. Smith Vice Chairman-Finance and (See above)
(See above) Secretary and Director
Edward E. Matthews President and Director (See above)
(See above)
J. Christopher Flowers Director Chairman of J.C. Flowers and Co. LLC
717 Fifth Avenue
26th Floor
New York, NY 10022
Houghton Freeman Director (See above)
(See above)
John J. Roberts Director (See above)
(See above)
Cesar Zalamea Director (See above)
(See above)
Each of the above officers and directors of CV Starr is a United
States citizen except Mr. Zalamea, who is a citizen of the Republic of the
Philippines.
Universal Foundation is a for-profit Panamanian investment holding
company whose principal asset is the Common Stock. Universal Foundation's
non-voting common stock is held by Starr International Charitable Trust
(Bermuda) and its voting common stock is held by S. G. Cubbon, Stuart Osborne,
Eligia G. Fernando, Cesar C. Zalamea and Aloysius B. Colayco. Its principal
office is Mercury House, 101 Front Street, Hamilton HM 12, Bermuda.
The following are the executive officers and directors of Universal
Foundation, their addresses and their principal occupations:
Name and Address Office Principal Occupation
- ------------------------------- ----------------------------- --------------------------------
Stuart Osborne President and Director President of Universal Foundation
Mercury House
101 Front Street
Hamilton HM 12, Bermuda
Eligia G. Fernando Director Retired
Mercury House
101 Front Street
Hamilton HM 12, Bermuda
Cesar C. Zalamea Director (See above)
(See above)
Aloysius B. Colayco Director Managing Director, Argosy Partners
Argosy Partners
8th Floor, Pacific Star Building
Makati City, Philippines
Jennifer Barclay Secretary Secretary of Universal Foundation
Mercury House
101 Front Street
Hamilton HM 12, Bermuda
Margaret Barnes Treasurer Treasurer of Universal Foundation
Fitzwilliam Hall
Fitzwilliam Place
Dublin 2, Ireland
Ms. Fernando, Mr. Zalamea and Mr. Colayco are citizens of the Republic
of the Philippines and Mr. Osborne, Ms. Barclay and Ms. Barnes are citizens of
the United Kingdom.
The Greenberg Foundation is a not-for-profit New York corporation
which makes charitable grants from time to time in accordance with its
policies. The Greenberg Foundation's principal office is 399 Park Avenue, 17th
Floor, New York, New York 10022.
The following are the executive officers and directors of the
Greenberg Foundation, their addresses and their principal occupations:
Name and Address Office Principal Occupation
- ------------------------------- ----------------------------- --------------------------------
Maurice R. Greenberg Chairman and Director (See above)
(See above)
Corinne P. Greenberg President and Director President and Director, Greenberg
399 Park Avenue, 17th Floor Foundation
New York, New York 10022
Jeffrey W. Greenberg Vice President and Director Vice President and Director,
399 Park Avenue, 17th Floor Greenberg Foundation
New York, New York 10022
Evan G. Greenberg Vice President and Director President and Chief Executive
399 Park Avenue, 17th Floor Officer, ACE Limited
New York, New York 10022
Lawrence S. Greenberg Vice President and Director President and Chief Executive
399 Park Avenue, 17th Floor Officer, ACE Limited
New York, New York 10022
Shake Nahapetian Treasurer Administrative Assistant, CV Starr
399 Park Avenue, 17th Floor
New York, New York 10022
Each of the above officers and directors of the Greenberg Foundation
is a United States citizen.
(d) and (e): During the last five years, none of Mr. Greenberg, Mr.
Matthews, Starr International, CV Starr, Universal Foundation, the Greenberg
Foundation or the other individuals disclosed in Item 2(a) above has (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding has been or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration
This Schedule 13D is being filed because, under the facts and
circumstances described in Items 2, 5 and 6, the Reporting Persons may be
deemed to be a group within the meaning of Section 13(d)(3) of the Act. This
filing is not being made as a result of any particular acquisitions or
dispositions of Common Stock by the Reporting Persons.
Item 4. Purpose of Transaction
Each of the Reporting Persons holds the securities reported herein for
investment purposes and reserves the right, in light of its ongoing evaluation
of the Issuer's financial condition, business, operations and prospects, the
market price of the Common Stock, conditions in the securities markets
generally, general economic and industry conditions, the Reporting Person's and
Issuer's respective business objectives, and other relevant factors, at any time
and as it deems appropriate, to change its plans and intentions, to increase or
decrease its investment in the Issuer, or to engage in discussions with the
Issuer and third parties or facilitate discussions between the Issuer and third
parties exploring such actions. In particular, any one or more of the Reporting
Persons may (i) purchase additional shares of Common Stock, (ii) sell or
transfer shares of Common Stock in public or private transactions, (iii) enter
into privately negotiated derivative transactions and/or public purchases and
sales of puts, calls and other derivative securities to hedge the market risk
of some or all of their positions in the Common Stock and/or (iv) take any other
action that might relate to or result in any of the actions set forth in
response to paragraphs (a) - (j) of Item 4 of Schedule 13D. Any such actions may
be effected at any time or from time to time, subject to any applicable
limitations imposed on the actions by the Securities Act of 1933, as amended, or
other applicable law.
On January 9, 2006, CV Starr consummated the tender offer (the
"Offer") commenced on December 1, 2005 after a complete tender by all eligible
stockholders. The Offer was open to any person who was, as of December 1, 2005,
not a director, officer, employee or otherwise employed by, or in a consulting
relationship with, CV Starr or any subsidiary of CV Starr as determined by CV
Starr, and was an owner as reflected on the books and records of CV Starr of
shares of Common Stock, no par value per share ("CV Starr Common Stock"), of CV
Starr, Class B Common Stock, no par value per share ("CV Starr Class B Common
Stock"), of CV Starr, or Preferred Stock, no par value per share, including
Special Preferred Stock, but excluding Series X-1 Preferred Stock ("CV Starr
Preferred Stock"), of CV Starr, to pay to such persons in cash the product of
(i) 142% times $300.00 (which is equal to $426.00) for each share of CV Starr
Common Stock and CV Starr Class B Common Stock validly tendered and not validly
withdrawn and (ii) 142% times the liquidation value of the applicable class and
series of CV Starr Preferred Stock as of December 1, 2005 validly tendered and
not validly withdrawn, upon the terms and subject to the conditions set forth
in the offer to purchase and the accompanying letter of transmittal, which
together constituted the Offer.
The final results of the Offer show that a total of 11,000 shares of
voting common stock, representing approximately 34.8% of the outstanding shares
of such stock, were validly tendered in the initial offering period, and 5,125
shares of voting common stock, representing approximately 16.2% of the
outstanding shares of such stock, were validly tendered in the subsequent
offering period. In addition, a total of 4,500 shares of non-voting common
stock, representing approximately 78.3% of such stock, were validly tendered in
the initial offering period, and 1,000 shares of non-voting common stock,
representing 17.4% of such stock, were validly tendered during the subsequent
offering period. The percentages in the above two sentences are calculated
based on the number of outstanding shares of CV Starr common stock as of the
close of business on December 29, 2005 and do not reflect any transactions in
CV Starr common stock subsequent to such date. Persons tendering shares in the
Offer were required to tender all of their shares of CV Starr common stock and
preferred stock. CV Starr has accepted for purchase and payment all of the
shares that were validly tendered during the Offer. Mssrs. Greenberg and
Matthews were not eligible to participate in the Offer, and thus their equity
interests in CV Starr increased as a result of the Offer.
The agreement previously disclosed whereby Mr. Matthews would purchase
up to 500 shares of CV Starr Common Stock at a price of $300.00 per share from
Howard I. Smith, Vice Chairman - Finance and Secretary and a Director of CV
Starr was not consummated. On January 4, 2006, CV Starr redeemed 540 shares of
its voting common stock from Mr. Smith for $300.00 per share.
Except as otherwise described in this Item 4 and Items 5 and 6 below,
no Reporting Person has formulated any plans or proposals which relate to or
would result in any of the events or transactions described in Items 4(a)
through (j) of the General Instructions to Schedule 13D under the Act.
Item 5. Interest in Securities of the Issuer
(a) and (b): The Reporting Persons may be deemed to be a group within
the meaning of Section 13(d)(3) of the Act consisting of the Reporting Persons
as a result of the facts and circumstances described in Items 2, 5 and 6 of
this Schedule 13D. The Reporting Persons as a group may be deemed beneficially
to own in the aggregate 396,124,637 shares of Common Stock, representing
approximately 15.2% of the outstanding shares of Common Stock (based on
2,595,607,825 shares of Common Stock reported by the Issuer as outstanding as
of September 30, 2005, in the Issuer's Form 10-Q filed on November 14, 2005).
Each of Mr. Greenberg, Mr. Matthews, Starr International, CV Starr, Universal
Foundation and the Greenberg Foundation disclaims beneficial ownership of the
shares of Common Stock held by the other members of such group.
Mr. Greenberg has the sole power to vote and direct the disposition of
2,902,938 shares of Common Stock, 52 shares of which are held directly by Mr.
Greenberg and 2,902,886 shares of which may be acquired pursuant to incentive
stock options previously granted by the Issuer to Mr. Greenberg as an officer
and director of the Issuer that are exercisable within 60 days of the date
hereof. Mr. Greenberg has shared power to vote and direct the disposition of
80,948,183 shares of Common Stock, 38,121,514 shares of which are held as a
tenant in common with Mr. Greenberg's wife, 107,916 shares of which are held in
family trusts of which Mr. Greenberg is a trustee, and 42,337,246 shares of
which are held by CV Starr (18,644,278 shares of which are held by the Starr
Trust, for which CV Starr is a beneficiary and Mr. Greenberg is a trustee) and
381,507 shares of which are held by the Greenberg Foundation, of which Mr.
Greenberg, his wife and family members are directors. Mr. Greenberg owns 27.2%
of the voting common stock of CV Starr directly. Based on Mr. Greenberg's voting
power in CV Starr, his position as a trustee of the Starr Trust, his position as
director and Chairman of the Board of the Greenberg Foundation and the other
facts and circumstances described in Items 2, 4, 5 and 6 of this Schedule 13D,
Mr. Greenberg may be deemed to beneficially own the shares of Common Stock held
by CV Starr, the Starr Trust and the Greenberg Foundation. Mr. Greenberg
disclaims beneficial ownership of the shares of Common Stock held by CV Starr,
the Starr Trust, Universal Foundation, the Greenberg Foundation, the family
trusts described above and the shares of Common Stock transferred to the MRG/CPG
Volaris Trust as described in Item 6.
Mr. Matthews has the sole power to vote and direct the disposition of
751,320 shares of Common Stock, 328,820 of which are held directly by Mr.
Matthews and 422,500 shares of which may be acquired pursuant to incentive
stock options previously granted by the Issuer to Mr. Matthews as an officer
and director of the Issuer that are exercisable within 60 days of the date
hereof. Mr. Matthews has shared power to vote and direct the disposition of
18,667,178 shares of Common Stock, 22,900 shares of which are held by Mr.
Matthew's wife and 18,644,278 shares of which are held by the Starr Trust, for
which CV Starr is a beneficiary and Mr. Matthews is a trustee. Based on the
facts and circumstances described in Items 2, 4, 5 and 6 of this Schedule 13D,
Mr. Matthews may be deemed to beneficially own the shares of Common Stock held
by the Starr Trust. Mr. Matthews disclaims beneficial ownership of the shares
of Common Stock held by the Starr Trust, the shares of Common Stock held by his
wife and the shares of Common Stock transferred to the EEM Volaris Trust as
described in Item 6.
Starr International has the sole power to vote and direct the
disposition of 308,905,397 shares of Common Stock held by Starr International
and the shared power to direct the disposition of 2,593,899 shares of Common
Stock held by Universal Foundation.
CV Starr has the shared power to vote and direct the disposition of
42,337,246 shares of Common Stock held by CV Starr (18,644,278 shares of which
are held by the Starr Trust, of which CV Starr is a beneficiary). CV Starr
disclaims beneficial ownership of the shares of Common Stock transferred to the
CV Starr Volaris Trust as described in Item 6.
Universal Foundation has the sole power to vote 2,593,899 shares of
Common Stock, 2,593,899 shares of which are held directly by Universal
Foundation. Pursuant to an Investment Management Agreement, Starr International
Advisors, Inc. ("Starr International Advisors"), a Delaware corporation and a
wholly owned subsidiary of Starr International, has the power to direct the
disposition of 2,593,899 shares of Common Stock held by Universal Foundation.
Mr. Matthews is President and Director of Starr International Advisors and Mr.
Greenberg is a Director of Starr International Advisors.
The Greenberg Foundation has the shared power to vote and direct the
disposition of 381,507 shares of Common Stock, 381,507 shares of which are held
directly by the Greenberg Foundation.
Executive officers and directors of Starr International beneficially
owned shares of Common Stock and had rights to acquire shares of Common Stock
exercisable within 60 days as follows:
Right to Acquire
Owned Shares (1) % (2) Shares (1) % (2)
---------------- ------- ---------------- --------
Maurice R. Greenberg (See above) (See above)
Edward E. Matthews (See above) (See above)
Lawrence Michael Murphy 50,000 (3) 0 0.0
Houghton Freeman 2,660,000 0.1 0 0.0
Howard I. Smith 70,000 (3) 0 0.0
John J. Roberts 3,600,000 0.1 0 0.0
Ernest Stempel 23,110,000 0.9 0 0.0
Cesar Zalamea 70,000 (3) 0 0.0
(1) Rounded to nearest 10,000 shares.
(2) Rounded to nearest 0.1%.
(3) Less than 0.1%.
Executive officers and directors of CV Starr beneficially owned shares
of Common Stock and had rights to acquire shares of Common Stock exercisable
within 60 days as follows:
Right to Acquire
Owned Shares (1) % (2) Shares (1) % (2)
---------------- ------- ---------------- --------
Maurice R. Greenberg (See above) (See above)
Howard I. Smith (See above) (See above)
Edward E. Matthews (See above) (See above)
J. Christopher Flowers 0 0.0 0 0.0
Houghton Freeman (See above) (See above)
John J. Roberts (See above) (See above)
Cesar Zalamea (See above) (See above)
(1) Rounded to nearest 10,000 shares.
(2) Rounded to nearest 0.1%.
(3) Less than 10,000 shares.
Executive officers and directors of Universal Foundation beneficially
owned shares of Common Stock and had rights to acquire shares of Common Stock
exercisable within 60 days as follows:
Right to Acquire
Owned Shares (1) % (2) Shares (1) % (2)
---------------- ------- ---------------- --------
Stuart Osborne 0 0.0 0 0.0
Eligia G. Fernando 40,000 (3) 0 0.0
Cesar C. Zalamea (See above) (See above)
Aloysius B. Colayco 0 0.0 0 0.0
Jennifer Barclay 0 0.0 0 0.0
Margaret Barnes 0 0.0 0 0.0
(1) Rounded to nearest 10,000 shares.
(2) Rounded to nearest 0.1%.
(3) Less than 0.1%.
Executive officers and directors of the Greenberg Foundation
beneficially owned shares of Common Stock and had rights to acquire shares of
Common Stock exercisable within 60 days as follows:
Right to Acquire
Owned Shares (1) % (2) Shares (1) % (2)
---------------- ------- ---------------- --------
Maurice R. Greenberg (See above) (See above)
Corinne P. Greenberg 43,488,099 1.7 0 0.0
Jeffrey W. Greenberg (4) (3) 0 0.0
Evan G. Greenberg 0 0.0 0 0.0
Lawrence S. Greenberg (4) (3) 0 0.0
Shake Nahapetian 50,000 (3) 0 0.0
(1) Rounded to nearest 10,000 shares.
(2) Rounded to nearest 0.1%.
(3) Less than 0.1%.
(4) Less than 10,000 shares.
(c) On November 15, 2005, CV Starr entered into a variable pre-paid
forward sale contract (the "CSFB Contract") for up to 4,423,116 shares (the
"CSFB Maximum Number") of Common Stock pursuant to a letter agreement by and
among CV Starr, Credit Suisse First Boston LLC and Credit Suisse First Boston
Capital LLC ("CSFB"). The final terms of the CSFB Contract, including the CSFB
Maximum Number of shares deliverable by CV Starr upon settlement, were
determined in a block transaction between CV Starr and CSFB (or its affiliate),
acting as a block positioner, in accordance with the Securities and Exchange
Commission's interpretative letter to Goldman, Sachs & Co., dated December 20,
1999 (the "No Action Letter"). CV Starr has received aggregate proceeds of
$240,000,043 under the CSFB Contract.
The CSFB Contract provides that for each of the 10 Scheduled Trading
Days (as defined in the CSFB Contract) prior to and including November 20, 2008
(the "CSFB Settlement Dates"), CV Starr will deliver a number of shares of
Common Stock to CSFB (or, at the election of CV Starr, the cash equivalent of
such shares) determined with respect to each CSFB Settlement Date as follows:
(a) if the VWAP Price (as defined in the CSFB Contract) per share of the Common
Stock (the "CSFB Settlement Price") is less than or equal to $65.85 (the "CSFB
Forward Floor Price"), a delivery of 1/10 of the CSFB Maximum Number of shares
of Common Stock, subject to rounding; (b) if the CSFB Settlement Price is
greater than the CSFB Forward Floor Price but less than or equal to $85.61 per
share (the "CSFB Forward Cap Price"), a delivery of shares equal to the CSFB
Forward Floor Price/CSFB Settlement Price x 1/10 of the CSFB Maximum Number of
shares of Common Stock, subject to rounding; and (c) if the CSFB Settlement
Price is greater than the CSFB Forward Cap Price, a delivery of shares equal to
((CSFB Forward Floor Price + (CSFB Settlement Price - CSFB Forward Cap Price))
/ CSFB Settlement Price) x 1/10 of the CSFB Maximum Number of shares of Common
Stock, subject to rounding.
On November 21, 2005, CV Starr entered into a variable pre-paid
forward sale contract (the "Confirmation") for up to 2,917,916 shares (the
"Citi Maximum Number") of Common Stock pursuant to the Master Terms and
Conditions for Pre-Paid Forward Contracts, dated as of November 15, 2005
(together with the Confirmation, the "Citi Contract"), by and between CV Starr
and Citibank, N.A. ("Citibank"). The final terms of the Citi Contract,
including the Citi Maximum Number of shares that will be deliverable by CV
Starr upon settlement, were determined in unsolicited brokerage transactions by
Citibank (or its affiliate) over a specified execution period beginning on
November 18, 2005, in accordance with the No Action Letter. CV Starr has
received aggregate proceeds of $160,000,000 under the Citi Contract.
The Citi Contract provides that for each of the 10 Scheduled Trading
Days (as defined in the Citi Contract) prior to and including December 10, 2008
(the "Citi Settlement Dates"), CV Starr will deliver a number of shares of
Common Stock to Citibank (or, at the election of CV Starr, the cash equivalent
of such shares) determined with respect to each Citi Settlement Date as
follows: (a) if the Relevant Price (as defined in the Citi Contract) per share
of the Common Stock (the "Citi Settlement Price") is less than or equal to
$66.8540 (the "Citi Forward Floor Price"), a delivery of 1/10 of the Citi
Maximum Number of shares of Common Stock, subject to rounding; (b) if the Citi
Settlement Price is greater than the Citi Forward Floor Price but less than or
equal to $86.9102 per share (the "Citi Forward Cap Price"), a delivery of
shares equal to the Citi Forward Floor Price/Citi Settlement Price x 1/10 of
the Citi Maximum Number of shares of Common Stock, subject to rounding; and (c)
if the Citi Settlement Price is greater than the Citi Forward Cap Price, a
delivery of shares equal to ((Citi Forward Floor Price + (Citi Settlement Price
- - Citi Forward Cap Price)) / Citi Settlement Price) x 1/10 of the Citi Maximum
Number of shares of Common Stock, subject to rounding.
The descriptions of the CSFB Contract and the Citi Contract are
qualified in their entirety by the text of such contracts, copies of which are
Exhibits B and C hereto, respectively.
On February 8, 2006, Starr International sold 200,000 shares of Common
Stock for $66.0081 per share. On February 10, 2006, Starr International sold
800,000 shares of Common Stock for $67.5325 per share. On February 14, 2006,
Starr International sold 100,000 shares of Common Stock for $68.3498 per share.
On February 24, 2006, Starr International sold 523,900 shares of Common Stock
for $67.0660 per share. On February 27, 2006, Starr International sold 376,100
shares of Common Stock for $66.9450 per share.
On February 23, 2006, Universal Foundation sold 50,900 shares of
Common Stock for $67.5123 per share. On February 28, 2006, Universal Foundation
sold 249,100 shares of Common Stock for $66.7580 per share. On March 1, 2006,
Universal Foundation sold 133,600 shares of Common Stock for $66.6016 per
share. On March 7, 2006, Universal Foundation sold 166, 400 shares of Common
Stock for $66.5282 per share.
On February 23, 2006, the Greenberg Foundation sold 20,086 shares of
Common Stock for $67.00 per share.
To the knowledge of each of the Reporting Persons, there were no other
transactions in the Common Stock that were effected during the past sixty days
by the Reporting Persons.
(d) and (e): Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
On March 7, 2006, Mr. Matthews and CV Starr separately entered into
agreements to transfer shares of Common Stock to certain trusts, as further
described below. On March 9, 2006, Mr. Greenberg separately entered into an
agreement to transfer shares of Common Stock to a trust, as further described
below.
On March 7, 2006, Mr. Matthews entered into an agreement to transfer
1,237,315 shares of Common Stock (the "EEM Trust Shares") to the 2006 EEM
Volaris Trust (the "EEM Volaris Trust"). The EEM Volaris Trust was established
under the 2006 EEM Volaris Trust Agreement, dated March 9, 2006 (the "EEM Trust
Agreement"), between Mr. Matthews, as settlor and sole beneficiary, and
Pitcairn Trust Company (the "EEM Volaris Trustee").
Under the EEM Trust Agreement, Mr. Matthews agrees to transfer the EEM
Trust Shares to the EEM Volaris Trustee, which is an independent trustee that is
unaffiliated with the Issuer or Mr. Matthews. The EEM Volaris Trustee has sole
power to vote and dispose of the EEM Trust Shares. The EEM Trust Agreement
instructs the EEM Volaris Trustee to enter into an investment management
agreement (the "EEM Investment Management Agreement") with Credit Suisse
Securities (USA) LLC as investment manager for the trust whereby such investment
manager will engage in an option overlay and spreading strategy with respect to
the EEM Trust Shares that seeks to enhance returns and reduce volatility. The
EEM Volaris Trust is revocable upon written notice by Mr. Matthews to the EEM
Volaris Trustee. Upon the termination of the EEM Volaris Trust, the EEM Volaris
Trustee shall distribute the principal (and income, to the extent not previously
distributed) as then constituted to anyone previously designated by Mr. Matthews
in writing, or, in default of the exercise of such general power of appointment,
to Mr. Matthews if then living; or if incapacitated, to Mr. Matthews' duly
appointed guardian or fiduciary, or an agent under a power of attorney; or if
deceased, to the duly qualified legal representative of Mr. Matthews' estate,
including the executors and/or administrators of the estate.
On March 7, 2006, CV Starr entered into an agreement to transfer
5,000,000 shares of Common Stock (the "CV Starr Trust Shares") to the 2006 CV
Starr Volaris Trust (the "CV Starr Volaris Trust"). The CV Starr Volaris Trust
was established under the 2006 CV Starr Volaris Trust Agreement dated March 7,
2006 (the "CV Starr Trust Agreement"), between CV Starr, as settlor and sole
beneficiary, and Pitcairn Trust Company (the "CV Starr Volaris Trustee").
Under the CV Starr Trust Agreement, CV Starr agrees to transfer the CV
Starr Trust Shares to the CV Starr Volaris Trustee, which is an independent
trustee that is unaffiliated with the Issuer or CV Starr. The CV Starr Volaris
Trustee has sole power to vote and dispose of the CV Starr Trust Shares. The CV
Starr Trust Agreement instructs the CV Starr Volaris Trustee to enter into an
investment management agreement (the "CV Starr Investment Management Agreement")
with Credit Suisse Securities (USA) LLC as investment manager for the trust
whereby such investment manager will engage in an option overlay and spreading
strategy with respect to the CV Starr Trust Shares that seeks to enhance returns
and reduce volatility. The CV Starr Volaris Trust is revocable upon written
notice by CV Starr to the CV Starr Volaris Trustee. Upon the termination of the
CV Starr Volaris Trust, the CV Starr Volaris Trustee shall distribute the
principal (and income, to the extent not previously distributed) as then
constituted to anyone previously designated by CV Starr in writing, or, in
default of the exercise of such general power of appointment, to CV Starr or its
successors-in-interest.
On March 9, 2006, Mr. Greenberg and his spouse entered into an
agreement to transfer 5,000,000 jointly owned shares of Common Stock (the
"MRG/CPG Trust Shares") to the 2006 MRG/CPG Volaris Trust (the "MRG/CPG Volaris
Trust"). The MRG/CPG Volaris Trust was established under the 2006 MRG/CPG
Volaris Trust Agreement, dated March 9, 2006 (the "MRG/CPG Trust Agreement"),
between Mr. and Mrs. Greenberg, each as a settlor with respect to his or her
one-half of the trust assets and as sole beneficiary of such half, and Pitcairn
Trust Company (the "MRG/CPG Volaris Trustee").
Under the MRG/CPG Trust Agreement, Mr. and Mrs. Greenberg agree to
transfer the MRG/CPG Trust Shares to the MRG/CPG Volaris Trustee, which is an
independent trustee that is unaffiliated with the Issuer, Mr. Greenberg or Mrs.
Greenberg. The MRG/CPG Volaris Trustee has sole power to vote and dispose of the
MRG/CPG Trust Shares. The MRG/CPG Trust Agreement instructs the MRG/CPG Volaris
Trustee to enter into an investment management agreement (the "MRG/CPG
Investment Management Agreement") with Credit Suisse Securities (USA) LLC as
investment manager for the trust whereby such investment manager will engage in
an option overlay and spreading strategy with respect to the MRG/CPG Trust
Shares that seeks to enhance returns and reduce volatility. The MRG/CPG Volaris
Trust is revocable, with respect to Mr. and Mrs. Greenberg's portion of this
Trust, upon written notice to the MRG/CPG Volaris Trustee by either Mr. or Mrs.
Greenberg, or completely revocable upon joint written notice to the MRG/CPG
Volaris Trustee. Upon the termination of the MRG/CPG Volaris Trust, the MRG/CPG
Volaris Trustee shall distribute the principal (and income, to the extent not
previously distributed) allocable to Mr. or Mrs. Greenberg, as then constituted,
to anyone previously designated by such person, respectively, in writing, or in
default of the exercise of such general power of appointment, to Mr. and Mrs.
Greenberg in his or her proportionate share if both then living; or if either
person is incapacitated, to such person's duly appointed guardian or fiduciary,
or an agent under a power of attorney executed by such incapacitated person; or
if deceased, to the duly qualified legal representative of such deceased
person's estate, including the executors and/or administrators of such person's
estate.
The descriptions of the EEM Volaris Trust, the EEM Investment
Management Agreement, the CV Starr Volaris Trust, the CV Starr Investment
Management Agreement, the MRG/CPG Volaris Trust, and the MRG/CPG Investment
Management Agreement are qualified in their entirety by the text of such
documents, copies of which are attached as Exhibits E through J hereto,
respectively.
Universal Foundation has granted approximately 127,698 options to
purchase shares of Common Stock to various individuals.
Items 2, 4 and 5 disclose (i) certain relationships between the
Reporting Persons, (ii) the Offer, (iii) the CSFB Contract and (iv) the Citi
Contract, which disclosures are hereby incorporated by reference into this Item
6 in their entirety. There are no contracts, arrangements or understandings
among the Reporting Persons, other than as described in this Item 6 and in Item
7 below, with respect to the shares of Common Stock reported on this Schedule
13D.
Item 7. Material to Be Filed as Exhibits
Exhibit A: Joint Filing Agreement, dated as of February 21, 2006,
by and among Mr. Greenberg, Mr. Matthews, Universal
Foundation, Inc., The Maurice R. and Corinne P. Greenberg
Family Foundation, Inc., Starr International Company, Inc.
and CV Starr & Co., Inc. (Incorporated by reference to
Exhibit A to the Schedule 13D filed with the Securities
and Exchange Commission in respect of the Issuer on
February 21, 2006).
Exhibit B: Letter Agreement and Transaction Supplement, each
dated as of November 15, 2005, by and among CV Starr &
Co., Inc., Credit Suisse First Boston LLC and Credit
Suisse First Boston Capital LLC. (Incorporated by
reference to Exhibit B to the Schedule 13D filed with the
Securities and Exchange Commission in respect of the
Issuer on November 23, 2005.)
Exhibit C: Master Terms and Conditions for Pre-Paid Forward
Contracts and Pre-Paid Forward Contract Confirmation,
dated as of November 15, 2005 and November 21, 2005,
respectively, by and between CV Starr & Co., Inc. and
Citibank, N.A. (Incorporated by reference to Exhibit C to
the Schedule 13D filed with the Securities and Exchange
Commission in respect of the Issuer on November 23, 2005.)
Exhibit D: Investment Management Agreement, dated as of January
13, 2006, by and between Starr International Advisors,
Inc. and Universal Foundation, Inc. (Incorporated by
reference to Exhibit D to the Schedule 13D filed with the
Securities and Exchange Commission in respect of the
Issuer on February 21, 2006.)
Exhibit E: 2006 EEM Volaris Trust Agreement, dated as of March 7,
2006, by and between Mr. Matthews and Pitcairn Trust
Company.
Exhibit F: Form of Volaris Volatility Management Discretionary
Investment Management Agreement, by and between Credit
Suisse Securities (USA) LLC and Pitcairn Trust Company as
the EEM Volaris Trustee.
Exhibit G: 2006 CV Starr Volaris Trust Agreement, dated as of March
7, 2006, by and between CV Starr and Pitcairn Trust
Company.
Exhibit H: Form of Volaris Volatility Management Discretionary
Investment Management Agreement, by and between Credit
Suisse Securities (USA) LLC and Pitcairn Trust Company as
the CV Starr Volaris Trustee.
Exhibit I: 2006 MRG/CPG Volaris Trust Agreement, dated as of
March 9, 2006, by and among Maurice R. Greenberg, Corinne
P. Greenberg and Pitcairn Trust Company.
Exhibit J: Form of Volaris Volatility Management Discretionary
Investment Management Agreement, by and between Credit
Suisse Securities (USA) LLC and Pitcairn Trust Company as
the MRG/CPG Volaris Trustee.
Exhibit K: Maurice R. Greenberg Power of Attorney, dated as of March
1, 2006.
Exhibit L: Edward E. Matthews Power of Attorney, dated as of
February 21, 2006. (Incorporated by reference to the
Form 4 filed with the Securities and Exchange Commission
in respect of the Issuer on March 9, 2006.)
Exhibit M: Starr International Company, Inc. Power of Attorney, dated
as of February 24, 2006.
Exhibit N: C.V. Starr & Co., Inc. Power of Attorney, dated as of
February 24, 2006. (Incorporated by reference to the
Form 4 filed with the Securities and Exchange Commission
in respect of the Issuer on March 9, 2006.)
Exhibit O: Universal Foundation, Inc. Power of Attorney, dated as of
February 21, 2006.
Exhibit P: The Maurice R. Greenberg and Corinne P. Greenberg Family
Foundation, Inc. Power of Attorney, dated as of February
21, 2006. (Incorporated by reference to the Form 3 filed
with the Securities and Exchange Commission in respect of
the Issuer on March 6, 2006.)
There are no other written agreements, contracts, arrangements,
understandings, plans or proposals within the category of those described in
Item 7 of the General Instructions to Schedule 13D under the Act.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: March 10, 2006 MAURICE R. GREENBERG
By: /s/ Bertil P-H Lundqvist
--------------------------------------
Name: Bertil P-H Lundqvist, Attorney-in-Fact
By: /s/ Leif B. King
--------------------------------------
Name: Leif B. King, Attorney-in-Fact
EDWARD E. MATTHEWS
By: /s/ Bertil P-H Lundqvist
--------------------------------------
Name: Bertil P-H Lundqvist, Attorney-in-Fact
By: /s/ Leif B. King
--------------------------------------
Name: Leif B. King, Attorney-in-Fact
STARR INTERNATIONAL COMPANY, INC.
By: /s/ Bertil P-H Lundqvist
--------------------------------------
Name: Bertil P-H Lundqvist, Attorney-in-Fact
By: /s/ Leif B. King
--------------------------------------
Name: Leif B. King, Attorney-in-Fact
C. V. STARR & CO., INC.
By: /s/ Bertil P-H Lundqvist
--------------------------------------
Name: Bertil P-H Lundqvist, Attorney-in-Fact
By: /s/ Leif B. King
--------------------------------------
Name: Leif B. King, Attorney-in-Fact
UNIVERSAL FOUNDATION, INC.
By: /s/ Bertil P-H Lundqvist
--------------------------------------
Name: Bertil P-H Lundqvist, Attorney-in-Fact
By: /s/ Leif B. King
--------------------------------------
Name: Leif B. King, Attorney-in-Fact
THE MAURICE R. AND CORINNE P. GREENBERG FAMILY
FOUNDATION, INC.
By: /s/ Bertil P-H Lundqvist
--------------------------------------
Name: Bertil P-H Lundqvist, Attorney-in-Fact
By: /s/ Leif B. King
--------------------------------------
Name: Leif B. King, Attorney-in-Fact
Exhibit E
THE 2006 EEM VOLARIS TRUST
THIS TRUST AGREEMENT (this "Agreement") is entered into on the 7th day
of March, 2006, by and between Edward E. Matthews (the "Settlor"), and Pitcairn
Trust Company, a Pennsylvania corporation (the "Trustee").
W I T N E S S E T H:
-------------------
FIRST: Name of Trust
----- -------------
This Trust shall be known as the 2006 EEM Volaris Trust (the "Trust").
SECOND: Trust Property
------ --------------
The Settlor hereby transfers, delivers and conveys to the Trustee all
of the Settlor's right, title and interest in and to the property set forth in
Schedule A, and the Trustee acknowledges receipt of such property, IN TRUST, and
agrees to hold, administer and distribute such property, as well as any other
property that may later become subject to this Trust under the terms and
conditions set forth below.
The trust property to which the provisions hereof shall apply shall
include not only the property set forth in Schedule A but also any other
property acceptable to the Trustee which the Settlor may hereafter add during
the Trust term and that may later become subject to this Trust, for the purposes
and on the terms and conditions set forth herein.
THIRD: Trust Purpose
----- -------------
Notwithstanding any other provision herein, the Settlor intends to
avoid any conflict of interest or appearance thereof that may arise from the
Settlor's duties and powers as a shareholder up to the date of this Agreement of
American International Group, Inc. (the "Issuer") in exercising any investment
decisions with regard to shares of the Issuer. In furtherance thereof, the
Settlor hereby creates this Trust, the primary purpose of which is to entrust to
the Trustee the authority (within the terms herein, including, without
limitation, the remaining provisions of this Article THIRD) to make all
decisions and effectuate all decisions as to when and to what extent any
transactions are effected with regard to any assets transferred to the Trust,
including any Issuer stock transferred hereto (the "Shares"), in all instances
without any participation in or knowledge of such decisions by the Settlor, the
Settlor's spouse, any dependent child of the Settlor or the Settlor's spouse, or
any officer, director, shareholder or other person whose relationship to the
Settlor or the Issuer gives such person access, directly or indirectly, to
material information about the Issuer that is not generally available to the
public (an "Interested Party"), subject to the provisions hereof. Although the
Trustee shall have full discretion, the Settlor directs that the Trustee enter
into a contract with Credit Suisse Securities (USA) LLC substantially in the
form of Schedule B, attached hereto, under which the Trustee will retain Credit
Suisse Securities (USA) LLC to extract returns from the trust's assets
identified in such contract based on stock market volatility, utilizing (i) a
low risk tolerance strategy (as defined in Exhibit B of such contract) when
Issuer common stock has a market price below ninety dollars ($90) per share and
(ii) a medium risk tolerance strategy (as defined in Exhibit B of such contract)
when Issuer common stock has a market price equal to or greater than ($90) per
share. Should such contract terminate for any reason, the Settlor directs the
Trustee to enter into a substantially similar contract with another investment
manager (each investment manager under this agreement, including Credit Suisse
Securities (USA) LLC, hereinafter referred to as the "Adviser" and each
investment manager contract hereinafter referred to as the "Adviser Contract").
Furthermore, the Settlor relieves the Trustee of all responsibility for managing
the underlying assets and hereby limits the Trustee's responsibility to
oversight of the Adviser. The Settlor authorizes the Trustee to rely solely on
statements provided by the Adviser to fulfill its oversight responsibilities as
Trustee. The Settlor acknowledges and agrees that the Settlor and/or his legal
and financial representatives and advisers, has received, reviewed and
understands (i) the disclosures, including, without limitation, the risk
disclosures relating to the Strategy (as defined in the Adviser Contract); (ii)
a copy of Part II of the Adviser's Form ADV; (iii) a copy of the document
entitled Characteristics and Risks of Standardized Options, and understands that
the Adviser shall provide a current copy of such document on request; and (iv)
the Risk Disclosure Statement Concerning Derivatives attached as Exhibit C to
the Adviser Contract.
FOURTH: Trust Administration
------ --------------------
(a) The Trustee shall collect the income from the trust property and
shall hold any cash, whether income or principal, received by the Trust in cash
or cash equivalents. The Trustee shall pay to the Settlor the amount of any cash
and cash equivalents on hand to the extent that the value of such cash and cash
equivalents shall be greater than five percent (5%) of the fair market value of
the Shares, measured at the end of each calendar quarter using for valuation
purposes the last sale price as reported on the last trading day on or prior to
the end of such quarter, such payment to be made within thirty (30) days
thereof, provided, however, that the Trustee may, in its absolute discretion,
withhold the payment of any such cash or cash equivalents as a reserve for any
cash requirements of the trust, including any fees, expenses or other
liabilities. The Trustee may pay from time to time so much of the balance of the
net income and principal, including to the extent of all thereof, to or for the
benefit of the Settlor; provided, however, that the Trustee shall not distribute
(other than pursuant to Article FIFTH herein) any Shares to the Settlor unless
otherwise permitted under this Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, the
Trustee shall distribute all net income of the trust during the life of the
Settlor to, and only to, the Settlor or to the Settlor's order (or, if deceased,
to the Settlor's estate), which income shall be so distributed no later than as
soon as practicable after the end of each calendar year, if and to the extent
that the Settlor so directs, and all amounts distributable under this Agreement
during the Settlor's life shall be distributed only to the Settlor or to his
order (or if incapacitated, to the Settlor's duly appointed guardian or
fiduciary).
(c) For purposes of this Article FOURTH, "income" shall include income
from all sources, regardless of whether characterized for other purposes as
principal or income including, without limitation, income generated with respect
to call options and/or other derivative securities.
FIFTH: Trust Termination
----- -----------------
Upon the earliest to occur of (a) the Settlor's death, (b) the
occurrence of an event described in Article EIGHTEENTH, or (c) written notice to
the Trustee from the Settlor or the Settlor's duly appointed guardian or
fiduciary, or an agent under a power of attorney revoking or ordering the
termination of this Trust (in any case, the "Termination Date"), the Trustee
shall distribute the principal (and income, to the extent not previously
distributed) as then constituted to anyone previously designated by the Settlor
in writing, including the Settlor, the Settlor's estate or creditors of the
Settlor's Estate, or, in default of the exercise of such general power of
appointment, to the Settlor if then living; or if incapacitated, to the
Settlor's duly appointed guardian or fiduciary, or an agent under a power of
attorney executed by the Settlor; or if deceased, to the duly qualified legal
representative of the Settlor's estate, including the executors and/or
administrators of the Settlor's estate.
SIXTH: Amendments
----- ----------
This Trust can be amended at any time or from time to time by the
Trustee, but only if the Trustee is advised by the Trustee's or the Settlor's
securities counsel in writing that such amendment is necessary or desirable, and
then only to the extent so necessary or desirable (a) to assure that the Trust
and the sale of the Shares, writing, settling and rolling of call options with
regard to the Shares, or any other derivative strategy effectuated by the
Trustee or its investment adviser relating to the Shares are consistent with (i)
then applicable securities laws, regulations or administrative policies or
interpretations, and (ii) any responsibility that the Trustee, Adviser or the
Settlor may have thereunder or (b) to avoid unanticipated liability of the
Settlor, Trust, Trustee or Adviser thereunder. If the Trustee intends to amend
the Trust pursuant to this Article SIXTH, it shall notify the Settlor in writing
at least three business days before the effective date of such amendment.
SEVENTH: General Powers of the Trustee
------- -----------------------------
In addition to any powers granted specifically or generally to the
Trustee as provided by law, and in addition to every power and discretion
conferred upon the Trustee by any provision hereof, the Settlor confers upon the
Trustee the express powers set forth in this Article to be exercised by the
Trustee in its sole discretion with respect to all property at any time coming
into its hands, whether principal or income and whether by purchase or otherwise
but at all times in accordance with Article THIRD:
(a) To take any actions with respect to transactions in the Shares for
so long as the Shares are held as an asset of the Trust; and hold the Shares in
the Trust, sell all or some of the Shares from time to time, write and roll
equity, index and over-the-counter covered calls and use call options and/or
other derivative strategies to generate income, manage risk, and facilitate exit
strategies for the account of the Settlor, provided that such action is not in
violation of any applicable laws;
(b) To own, hold and possess such other securities and interests in the
Issuer or other entities, either publicly or closely held, as part of or as all
of the Trust assets for the entire Trust term, and continue to invest the
principal of the Trust as then constituted in any such securities or interests
as the Trustee in its discretion deems appropriate. The Trustee shall not be
liable for any loss resulting from the retention of the Shares, or such
securities or interests as part of or as all of the assets of the Trust. The
Trustee shall have the power to retain the Shares and such securities or
interests, notwithstanding any applicable law relating to the investment of
trust assets, including any laws requiring diversification of trust assets;
(c) With respect to any stock or other securities forming part of this
Trust, to exercise all voting rights, either in person or by proxy; exercise
conversion, subscription, option and similar rights; enter or refuse to enter
any dissolution, liquidation, consolidation, recapitalization, reorganization,
merger or other change in capital structure, and in connection therewith, make
exchanges of stock or other securities and enter into agreements on such terms
and conditions as the Trustee may deem advisable; including without limitation,
the deposit of any property with any protective, reorganization or similar
committee, the delegation of discretionary powers thereto, the sharing in the
payment of its expenses and compensation and the payment of any assessments
levied with respect to such property; receive and retain property under any such
plan whether or not the same is of a class in which fiduciaries are authorized
by law to invest trust funds, and enter into voting trusts and agreements with
other stockholders, and other holders of securities, or any one or more so such
person, for such purposes and for such period of time (whether or not the same
extends beyond the actual or probable duration of any trust created hereunder),
and upon such terms and conditions as the Trustee shall deem advisable,
provided, however, that notwithstanding the foregoing or any other provision of
this Trust, the Trustee shall have full and absolute discretion with respect to
the exercise of all voting rights, such discretion to include, without
limitation, the authority to vote in accordance with any recommendation, to
Issuer securityholders generally, of any independent third party, including
Institutional Shareholder Services, Inc;
(d) To invest in mortgage participations, shares of investment trusts
and regulated investment companies, including those controlled by any investment
advisor or investment counsel employed by the Trustee, mutual funds, money
market funds and index funds that may be acquired by prudent investors;
(e) To hold securities, including stock of the Issuer, or other
property in the Trustee's name as the Trustee under the Trust, in the Trustee's
own name or in the name of a nominee; or the Trustee may hold securities
unregistered in such condition that ownership will pass by delivery;
(f) To make executory contracts and grant options for any period and
for any purpose;
(g) To buy and trade in securities and other financial instruments of
any nature; buy and sell (covered or uncovered) equity, index and over-the
counter options and otherwise deal in puts and calls; and to maintain and
operate margin accounts and other accounts with brokers as security for loans
and advances made to the Trustee; in particular, the Trustee is specifically
authorized to sell securities to cover any of the Trust's expenses;
(h) To prosecute, defend, contest or otherwise litigate, at the expense
of the Trust, legal actions or other proceedings for the protection or benefit
of the Trustee or Trust. The Trustee shall further have the power to pay,
compromise, release, adjust or submit to arbitration any debt, claim or
controversy against or in favor of the Trust, as long as the Trustee reasonably
believes that such action will be beneficial to the Trust;
(i) To carry, at the expense of the Trust, insurance of such types and
in such amounts as the Trustee may deem advisable to insure the trust assets
against any loss or damage and protect the Trustee against third party
liability;
(j) To employ and pay the fees of, at the expense of the Trust, through
the sale of trust assets if necessary, agents, experts, accountants, counsel,
investment advisors, custodians, brokers, and others (including the Trustee, its
successor or any affiliate) and delegate discretionary powers (including
investment functions) to, and rely upon information and advice furnished by such
agents, experts, accountants, counsel, investment advisors, custodians, brokers
and others in connection with issues specific to the Trust, the Settlor or the
trust estate in connection with the Trustee's management, administration and
protection of the trust estate; and
(k) To release or to restrict the scope of any power that the Trustee
may hold in connection with the Trust hereunder, whether such power is expressly
granted in this instrument or implied by law. The Trustee shall exercise this
power in a written instrument executed by the Trustee and delivered to the
Settlor, specifying the power(s) to be released or restricted and the nature of
the restriction.
EIGHTH: Successor Trustees
------ ------------------
(a) If the Trustee shall for any reason cease to act as the Trustee of
the Trust, the Trustee shall promptly notify the Settlor of such occurrence and
such person(s) as the Settlor shall appoint in writing shall act as the
Trustee(s); provided, however, any successor Trustee appointed as hereinabove
provided may not be the Settlor or any other Interested Party. All appointments
of successor Trustee(s) shall be exercised in writing, duly acknowledged and
shall be effective upon the written acceptance of the successor Trustee
delivered to the Settlor.
(b) Any successor Trustee shall succeed as the Trustee of the Trust
with like effect as though originally named the Trustee under this instrument.
All authority, powers and discretions conferred on the original Trustee under
this instrument shall pass to any successor Trustee.
(c) No bond or other security shall be required of any Trustee named
herein, or appointed as hereinabove provided, for the faithful performance of
such Trustee's duties in any state or other jurisdiction.
NINTH: Trustee Compensation
----- --------------------
The Trustee shall be entitled to receive compensation for its services
for acting in any fiduciary capacity under this instrument in accordance with
Schedule C attached hereto and incorporated by reference herein.
TENTH: Trustee Resignation
----- -------------------
The Trustee may resign as the Trustee hereunder at any time without
leave of the Court by giving written notice to the Settlor. The resignation
shall become effective on the acceptance of the Trusteeship by the successor
Trustee(s) designated pursuant to Article EIGHTH hereof. Upon the written
acceptance(s) by the appointed successor Trustee(s), and duly acknowledged
receipt and release of the Settlor, the resigning Trustee shall (i) promptly
deliver all trust assets in its possession to the successor Trustee(s), (ii)
execute all documents and (iii) do all such things as may be necessary therefor.
ELEVENTH: Trustee Removal
-------- ---------------
The Settlor may remove any acting Trustee, with or without cause, by
giving written notice to the Trustee, and one or more successors thereto shall
be appointed in accordance with Article EIGHTH hereof. Upon the written
acceptance(s) by the appointed successor Trustee(s), and duly acknowledged
receipt and release of the Settlor, the removed Trustee shall (i) promptly
deliver all trust assets in its possession to the successor Trustee(s), (ii)
execute all documents and (iii) do all such things as may be necessary therefor.
TWELFTH: Trustee Liability
------- -----------------
(a) A successor Trustee shall not be responsible for the acts or
omissions of any prior Trustee.
(b) The original Trustee shall not be liable to the Settlor, or the
Settlor's estate, heirs, executors administrators and assigns, for any act,
omission or default of the Trustee, including but not limited to exercising
voting rights as provided under clause (c) of Article SEVENTH hereof , in its
complete discretion, or of any other person, except by reason of the Trustee's
acting in bad faith, willful misconduct or gross negligence.
(c) The Trust, the Settlor or the Settlor's estate shall indemnify the
Trustee to the fullest extent permitted by law, and shall save and hold the
Trustee harmless from and in respect of all fees, costs and expenses incurred,
including attorneys' fees, in connection with or resulting from any claim,
action or demand against (or threatened against) the Trust or the Trustee, which
arise out of or in any way relate to the Trust or the trust estate, or the
performance of the Trustee's duties under this instrument, including but not
limited to following the income extraction program as described under Article
THIRD hereof, and all such claims, actions and demands and any losses or damages
resulting therefrom, including amounts paid in settlement or compromise of any
such claim, action or demand; provided, however, this indemnity shall not extend
to conduct by the Trustee that is adjudged to constitute bad faith, willful
misconduct or gross negligence.
(d) Except to the extent any liability, loss or depreciation results
from the Trustee's bad faith, willful misconduct or gross negligence, (i) the
Settlor, his heirs, executors, administrators, and assigns shall indemnify and
hold the Trustee harmless from any and all liability resulting from the exercise
or non-exercise of its discretion to engage in or disengage from any program
designed to diversify or increase the return on the Issuer's common stock, (ii)
the Trustee shall not be responsible for any loss or depreciation in value of
any property authorized to be retained or acquired and (iii) the judgment of the
Trustee with respect to the exercise of its discretion shall be binding and
conclusive upon all persons who are beneficiaries or otherwise interested
parties to this Trust.
(e) Unless resulting from the Trustee's bad faith, willful misconduct
or gross negligence, and upon satisfaction of the conditions set forth herein
with respect to each such action, every election, determination or other
exercise of discretion by the Trustee with respect to the retention, disposition
or acquisition of any trust assets shall be deemed to have been made with
reasonable care, prudence and diligence by the Trustee.
THIRTEENTH: Adviser Liability
---------- -----------------
(a) The Adviser shall not be liable to the Settlor, the Trustee or the
Settlor's estate, heirs, executors, administrators and assigns, for any act,
omission or default of the Adviser or of any other person, except by reason of
the Adviser's acting in bad faith, willful misconduct or gross negligence.
(b) The Trust, the Settlor or the Settlor's estate shall indemnify the
Adviser to the fullest extent permitted by law, and shall save and hold the
Adviser harmless from and in respect of all fees, costs and expenses incurred,
including reasonable attorneys' fees, in connection with or resulting from any
claim, action or demand against (or threatened against) the Trust or the
Adviser, which arise out of or in any way relate to the Trust or the trust
estate, or the performance of the Adviser's duties hereunder or under the
Adviser Contract, including but not limited to following the investment program
referred to in Article THIRD hereof, and all such claims, actions and demands
and any losses or damages resulting therefrom, including amounts paid in
settlement or compromise of any such claim, action or demand; provided, however,
(1) this indemnity shall not extend to conduct by the Adviser that is adjudged
by a court of appropriate jurisdiction to constitute bad faith, willful
misconduct or gross negligence by the Adviser, (2) the Adviser shall provide
written notice to the Trustee and Settlor of any such claim, action or demand
relating to such indemnification, and (3) the settlement or compromise of any
such claim, action or demand shall be approved in writing by the Settlor, which
consent shall not be unreasonably withheld.
(c) Except to the extent any liability, loss, depreciation or the
Adviser's judgment results from the Adviser's bad faith, willful misconduct or
gross negligence, (i) the Settlor, his heirs, executors, administrators, and
assigns shall indemnify and hold the Adviser harmless from any and all liability
resulting from the exercise or non-exercise of its discretion to engage in or
disengage from any program designed to diversify or increase the return on the
Issuer's common stock, (ii) the Adviser shall not be responsible for any loss or
depreciation in value of any property authorized to be retained or acquired and
(iii) the judgment of the Adviser with respect to the exercise of its discretion
shall be binding and conclusive upon all persons who are beneficiaries or
otherwise interested parties to this Trust.
(d) Unless resulting from the Adviser's bad faith, willful misconduct
or gross negligence, and upon satisfaction of the conditions set forth herein
with respect to each such action, every election, determination or other
exercise of discretion by the Adviser with respect to the retention, disposition
or acquisition of any trust assets shall be deemed to have been made with
reasonable care, prudence and diligence by the Adviser.
FOURTEENTH: Statements of the Trustee
---------- -------------------------
A. The Trustee shall generate general account summary information each
calendar quarter and may provide to Settlor more detailed statements of account
activity from time to time, subject to Article SIXTEENTH hereof. Statements
shall be provided no earlier than the earlier of (i) 90 days from the date of
the statement and (ii) the last expiration date of open positions listed on such
statement.
B. A successor Trustee may accept as correct any statements of trust
assets made by any predecessor Trustee; and no successor Trustee shall have any
duty to take action to obtain redress for breach of trust committed by any
predecessor Trustee, unless requested in writing by a person having a present or
future beneficial interest in the Trust. A successor Trustee, however, may
institute any action or proceeding for the settlement of the statements, acts or
omissions of any predecessor Trustee.
FIFTEENTH: Grantor Trust Status
--------- --------------------
The Settlor intends that the Trust shall be taxed as a "grantor trust"
pursuant to Section 676 of the Internal Revenue Code of 1986, as amended. The
Trustee shall file any required income tax, information and other returns for
the Trust promptly after the close of each taxable year of the Trust (or, if
earlier, as required by applicable law) and shall timely provide the Settlor
with only such information as shall be necessary to enable the Settlor to timely
file his federal, state and local income tax, information and other returns with
respect to his interest in the Trust or as otherwise required by applicable law.
The Trustee is hereby authorized to make an election under Regulation ss.
1.671-4(b)(2)(i)(A) to use the Settlor's tax identification number if such
election can be made under applicable law. If such an election is made, the
Trustee shall provide the Settlor with the information required by Regulation
ss. 1.671-4(b)(2)(ii). Upon Trustee's request the Settlor shall provide the
Trustee with the completed IRS Form W-9 (or any successor thereof). Any tax
advice or services required by the Trust, or the Trustee with respect to the
Trust, shall be provided, at the expense of the Trust, by a firm authorized by
the Settlor from time to time, and any filing with any tax authority on behalf
of the Trust, or the Trustee with respect to the Trust, shall require the prior
consent of the Settlor. The tax advisor initially authorized by the Settlor
shall be the firm of Kronish Lieb Weiner & Hellman LLP.
SIXTEENTH: Blind Trust between the Settlor and the Trustee
--------- -----------------------------------------------
A. Prohibition on Direct or Indirect Communications. Except as
otherwise specifically provided in this Agreement, the Settlor and the Trustee
shall not communicate, directly or indirectly, about the Shares or other
securities in the Issuer.
B. Limitation on Equity Ownership. In no event shall the Settlor place
in the Trust securities that, when aggregated with any securities of the same
issuer already held in the Trust, would represent beneficial ownership equal to
or greater than 10% of the outstanding equity securities of a corporation or
other entity (including the Issuer) if such class of securities is registered
under Section 12 of the Exchange Act.
C. Compliance with Rule 144. With respect to transactions, including
but not limited to, any sales, covered call writing programs, derivative
strategies, or other dispositions by the Trustee with regard to the Shares, the
Trustee shall transact in such securities in compliance with Rule 144 of the
Securities Act of 1933, as amended ("Rule 144") and make, or cause a third
party, including any Adviser, to make, such filings as required. The Settlor
shall promptly give notice to the Trustee of any intended disposition or
activity that may be deemed a disposition of any of the Issuer's securities held
by the Settlor, the Settlor's spouse or any other person or entity, including
deemed dispositions pursuant to benefit plans, whose transactions in the
Issuer's securities may be aggregated with or attributable to the Settlor, prior
to such disposition or deemed disposition, which may include, but not be limited
to gifts, sales, hedging activities, or other transfers. Such intended
disposition or deemed disposition shall only take place if approved in writing
by the Trustee if in the Trustee's sole discretion such disposition or deemed
disposition is not in conflict with the Trustee's actions required or allowed
under this Trust and Rule 144. Also, to facilitate any Rule 144 filings required
to be made by the Settlor upon such disposition or deemed disposition, the
Trustee shall supply the Settlor with the information required to be completed
on such filing relating to the Trust's activities. In accepting any securities,
the Trustee may rely on the Settlor's representation that such transfer will
comply with the limitations provided in this paragraph.
D. Compliance with Section 16 by the Settlor. The Settlor shall comply
with any and all reporting requirements under Section 16 of the Exchange Act
upon the transfer of any assets to the Trust or back to the Settlor, including
filing all Form 4's and Form 5's required by applicable Exchange Act rules. To
facilitate such compliance, the Trustee shall notify the Settlor and the
Settlor's designated representatives of all transactions effected by the Trust
that may be reportable under Section 16(a) of the Exchange Act not later than
one day after initiating each such transaction. In addition, the Settlor will
promptly provide to the Trustee a list of all transactions reportable under
Section 16(a) of the Exchange Act executed within seven (7) months previous to
the date hereof by the Settlor or anyone whose activities may be attributed to
the Settlor, including transactions that are exempt from Section 16(b) of the
Exchange Act.
E. Investment Control by the Settlor. The Settlor and the Trustee
acknowledge and agree that the Settlor does not have or share and will not
exercise authority or control over, nor will attempt to influence in any way the
Trustee's decisions that directly or indirectly affect the acquisition or
disposition of any options, derivative securities or other securities of the
Issuer or relating to the Issuer or the Issuer's securities by the Trust,
including decisions to continue to hold an investment ("Investment Decisions").
F. No Voting Control by the Settlor. The Settlor and the Trustee
acknowledge and agree that the Settlor does not have or share and will not
exercise authority or control over, nor will attempt to influence in any way,
the Trustee's decisions relating to the voting of the Shares (or any decision to
refrain from voting on a matter) or the giving of a proxy with respect thereto
("Voting Decisions").
G. No Solicitation of Advice by the Trustee. The Trustee acknowledges
and agrees that it will not under any circumstances request from any Interested
Party, directly or indirectly, any information, regardless of its form, which
may be written, oral, electronic "soft copy" or any other form used to
communicate, concerning, without limitation, the results of operations,
financial condition, technology, research and development activities, employees,
officers, directors, business or prospects of the Issuer or any other
information that could materially influence an Investment Decision or a Voting
Decision ("Advice"). The foregoing notwithstanding, the Settlor and the Trustee
agree and understand that the Trustee, as part of keeping itself fully informed
regarding the Issuer in particular and regarding its industry segment and the
market in general, may participate in analyst calls and other public
communications from the Issuer irrespective of whether the Settlor or any other
Interested Party serves as the spokesperson for the Issuer during the course of
such public communications and further, that participating in such analyst calls
and other public communications and communications with or on behalf of the
Issuer will not be deemed a violation of the Trust, or the Trustee's duties
hereunder. The parties acknowledge and agree that the restrictions on the
"Trustee" in this clause G shall be deemed to apply solely to the employees of
the trust department of any corporate Trustee responsible for administering this
Trust and not to the Trustee in its corporate capacity generally, in its
capacity as a service provider outside of its trust department, or in its
capacity as a service provider to other accounts within its trust department.
H. No Provision of Advice by the Settlor. The Settlor acknowledges and
agrees that under no circumstances, whether directly or indirectly, will he
provide any Advice to the Trustee or to any other person associated with
Investment Decisions or Voting Decisions with respect to the Shares. The Settlor
and the Trustee further acknowledge and agree that, should the Settlor be
approached by any of the foregoing persons seeking to engage in a dialogue (oral
or written) concerning any subject that might have a possible bearing on an
Investment Decision or a Voting Decision, the Settlor will inform the other
person involved in the dialogue of the obligations of the parties hereunder, and
will refrain from providing any Advice during the course of any such dialogue.
Without limiting the foregoing, the Settlor specifically agrees that he will not
provide to the Trustee or its agents or associates any information regarding the
Issuer that he has obtained through his position as a director, officer or
employee of the Issuer or an affiliate of any such director, officer or
employee.
I. Material non-public information. The Trustee represents that the
employees of the Trustee administering the Trust have no material non-public
information about the Issuer and shall not execute any transactions in the Trust
property while in possession of such information. The parties acknowledge and
agree that the restrictions on the "Trustee" in this clause shall be deemed to
apply solely to the employees of the trust department of any corporate Trustee
responsible for administering this Trust and not to the Trustee in its corporate
capacity generally, in its capacity as a service provider outside of its trust
department, or in its capacity as a service provider to other accounts within
its trust department. In addition, the parties agree that the transactions by
the Trustee in the Trust property contemplated hereunder are independent of any
other transactions that Settlor may or may not take with respect to securities
of the Issuer or otherwise.
SEVENTEENTH: Situs of the Trust
----------- ------------------
This Agreement shall be construed in accordance with the custom and
usage prevailing in, and be regulated by the laws of the Commonwealth of
Pennsylvania. As long as the Trust is a Pennsylvania trust, the law governing
the administration of the Trust shall be controlled by Pennsylvania law. If
Trustee proposes to effect any change that would cause the Trust to cease to be
a Pennsylvania trust, it shall notify Settlor at least ten days in advance of
effecting such change. This Article shall apply regardless of any change of
residence of Trustee, or any beneficiary, or the appointment or substitution of
a Trustee residing or doing business in another state.
EIGHTEENTH: Severability of Provisions
---------- --------------------------
If any provisions of this instrument are declared invalid or
unenforceable, the remaining provisions shall nevertheless be carried into
effect; provided, however, that the parties acknowledge that a principal purpose
of the transactions effectuated by the Trust is that the transactions not be
attributable to the Settlor for purposes of Section 16 of the Exchange Act and,
if any provision of this Agreement that is necessary or advisable for such
purpose is declared by a court of appropriate jurisdiction to be invalid or
unenforceable, then this Trust will terminate.
NINETEENTH: Loans
---------- -----
The Trustee has the power upon any terms, including on a recourse or
non-recourse basis, to borrow money from any person, including itself, its
successor or any affiliate or any Adviser, in an amount up to ten (10%) percent
of the trust assets, valued as of the date of such loan, to be secured by the
trust assets, for any lawful purpose and to pledge assets as security for
repayment. The Trustee, in its corporate capacity, is also authorized, in its
sole discretion, to lend to the Settlor up to the maximum amount permitted by
law, which loans to the Settlor shall be full recourse against the Settlor.
TWENTIETH: Execution in Counterparts
--------- -------------------------
This Agreement may be executed via facsimile, in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
TWENTY-FIRST: Sole Agreement
------------ --------------
All prior understandings, agreements, representations and warranties,
oral or written, between the Settlor and the Trustee are merged in this
instrument.
TWENTY-SECOND: Successors
------------- ----------
This instrument shall be binding upon and inure to the benefit of the
parties hereto, their successors, heirs, executors, and administrators.
IN WITNESS WHEREOF, the Settlor and the Trustee have duly executed this
agreement as of the 7th day of March, 2006.
SETTLOR:
/s/ Edward E. Matthews /s/ Bertil P-H Lundqvist
- -------------------------------- (SEAL) ------------------------------------
Edward E. Matthews WITNESS
TRUSTEE:
PITCAIRN TRUST COMPANY
By: /s/ Averill R. Jarvis ATTEST: /s/ Denise L. Wallace
--------------------------- ------------------------------------
Name: Averill R. Jarvis Ass't. Sec'y.
Title: Senior Vice President
ACKNOWLEDGMENT OF SETTLOR
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On March 7, 2006 before me, Lynne E. Harrison the undersigned,
personally appeared Edward E. Matthews personally known to me or provide to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
the individual, or the person upon behalf of which the individual acted executed
the instrument.
(SEAL)
/s/ Lynne E. Harrison
-----------------------------------------
Notary Public
ACKNOWLEDGMENT OF TRUSTEE
COMMONWEALTH OF PENNSYLVANIA )
) SS.:
COUNTY OF MONTGOMERY )
On March 9, 2006 before me, Christina L. Pastor the undersigned,
personally appeared Averill R. Jarvis personally known to me or provide to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted executed the
instrument.
/s/ Christina Pastor
-----------------------------------------
Notary Public
(SEAL)
Exhibit F
CREDIT SUISSE SECURITIES (USA) LLC
VOLARIS VOLATILITY MANAGEMENT
DISCRETIONARY INVESTMENT MANAGEMENT
AGREEMENT FOR BLIND TRUSTS
This Investment Management Agreement is entered into this ____ day of
March, 2006 by and between CREDIT SUISSE SECURITIES (USA) LLC, a Limited
Liability Company, having its principal place of business at 11 Madison Avenue,
New York, NY 10010 ("Adviser") and Pitcairn Trust Company, a Pennsylvania
Corporation, with an address at 165 Township Line Rd Ste 3000, Jenkintown, PA
19046, as Trustee of the 2006 EEM Volaris Trust (the "Client").
Whereas, Adviser designs and monitors an option overlay and spreading
strategy that seeks to enhance returns and reduce volatility (the "Strategy");
and
Whereas, the assets identified on Exhibit A hereof are held in an
account (the "Account") established with the Adviser and cleared and custodied
at Pershing LLC (the "Custodian");
Whereas, the Client wishes to engage the Adviser to act as a
discretionary investment adviser to the Client implementing the Strategy with
respect to the assets of the Account;
Now, therefore, Client and Adviser agree as follows:
1. Appointment of Adviser.
----------------------
Client appoints Adviser as discretionary investment adviser for the
assets of the Account listed in Exhibit A attached hereto with full power and
authority to supervise and direct the investments of and for the Account in
conjunction with implementation of the Strategy without prior consultation with
Client. Client has elected the Strategy in accordance with direction from the
Settlor of the 2006 EEM Volaris Trust.
Adviser's investment decisions and advice for the Account shall be in
accordance with (i) the investment objectives and guidelines for the Account as
described in Exhibit B attached hereto ("Investment Guidelines"), (ii) the Trust
Agreement, (iii) any written instructions provided by Client to Adviser and (iv)
the information on the New Account Form executed by Client which is incorporated
by reference. It shall be the responsibility of Client to advise Adviser in
writing of any changes to any of the referenced documents.
Adviser is hereby appointed Client's agent with full power and
authority with respect to the Account assets: (a) to purchase or sell options in
accordance with the Investment Guidelines; (b) to execute transactions for the
Account itself and/or with one or more securities brokerage firms as Adviser may
select; (c) to sign and enter into on behalf of Client all documentation
necessary for the management of the Account as contemplated in this Agreement,
for which purpose Client appoints Agent attorney-in-fact; and (d) to act on
behalf of Client in all matters necessary or incidental to management of the
Account. This discretionary authority shall remain in full force and effect
until terminated pursuant to paragraph 14 hereof.
2. Services of Adviser.
-------------------
By executing this Agreement, Adviser accepts the appointment as
investment adviser and agrees to supervise and direct the investments of and for
the Account in accordance with Paragraph 1 and the Strategy. The
responsibilities of Adviser do not extend to any assets of the Account other
than those listed on Exhibit A attached hereto and any options purchased or sold
pursuant to clause (a) of paragraph 1 hereof. Adviser does not give legal, tax
or estate planning advice.
Except as may be otherwise required by law, the Adviser will not be
required to take any action or render any advice with respect to the voting of
proxies solicited by or with respect to the issuers of securities in which the
assets of the Account may be invested.
3. Representations of Adviser.
--------------------------
Adviser represents and warrants that it is and will at all times during
the term of this Agreement continue to be duly registered with the Securities
and Exchange Commission as an investment adviser under the Investment Advisers
Act of 1940, as amended (the "Advisers Act") and is not an affiliate of,
controlled by or under common control with the issuer of the assets held in the
Account.
4. Representations and Indemnification by Client.
---------------------------------------------
Client represents and warrants that it is authorized by law and by the
terms of the governing document to act as Trustee of the 2006 EEM Volaris Trust,
and that as such has the authority to delegate to Adviser the investment
management of the Account as provided in this Agreement, and such delegation has
been accomplished in accordance with procedures and permitted by the governing
document and by law.
The execution and delivery of this Agreement by Client shall constitute
the representation that the terms hereof do not violate any obligation by which
Client is bound, whether arising by contract, operation of law or otherwise, and
that (a) this Agreement will be binding upon Client in accordance with its
terms; (b) the person executing this Agreement on behalf of the Client is fully
authorized to enter into this Agreement; (c) the Client will deliver to the
Adviser such evidence of such person's authority to execute this Agreement on
behalf of the Client as the Adviser may reasonably require; (d) the Client
received a copy of Part II of the Adviser's Form ADV more than 48 hours prior to
execution of this Agreement; (e) the Client has received a copy of and has read
the document entitled Characteristics and Risks of Standardized Options
(document required to be sent to all clients prior to effecting option
transactions), and understands that the Adviser shall provide a current copy of
such document to the Client on request; and (f) the Client has read, executed
and understands the Risk Disclosure Statement Concerning Derivatives attached as
Exhibit C.
Client represents and warrants that all information it provides to
Adviser pursuant to Paragraph 6(d) hereof will be accurate and complete in all
material respects. Client agrees to indemnify and hold harmless Adviser, its
affiliates and its assignees (each such person, an "Indemnified Party") from and
against any and all losses, claims, damages and liabilities, joint or several,
to which such Indemnified Party may become subject, and relating to or arising
out of any breach of such representation and warranty, and will reimburse any
Indemnified Party for all expenses (including reasonable counsel fees and
expenses) as they are incurred in connection with the investigation of,
preparation for or defense or settlement of any pending or threatened claim or
any action, suit or proceeding arising therefrom, whether or not such claim,
action, suit or proceeding is initiated or brought by or on behalf of Client.
5. Transaction Procedures; Brokerage.
---------------------------------
Adviser may, but is not obligated to, aggregate purchase or sale orders
with those of other client accounts when executing transactions on behalf of
Client.
Unless otherwise directed, in exercising the authority granted to it to
place orders for the purchase or sale of securities and/or other financial
instruments, Adviser is authorized to execute transactions itself and/or
establish and maintain brokerage accounts, select any broker or dealer
(including any broker-dealer affiliated with Adviser) and negotiate commissions
and fees to be paid on such transactions, subject to a continuing obligation to
seek to obtain the best price, execution and overall terms. In instances where
the Adviser (as a registered broker-dealer) executes transactions, the Client
will pay brokerage commissions at the posted rates of Adviser unless otherwise
agreed in writing prior to the execution of this Agreement.
Client understands that, pursuant to an automatic cash sweep program,
cash awaiting investment or reinvestment will be invested in the money market
fund selected by Client at the time the Account is opened. Adviser may receive
revenue sharing payments or distribution payments pursuant to Rule 12b-1 of the
Investment Company Act of 1940. Such payments are not credited back to Client in
calculating the investment advisory fee set forth in paragraph 9. Information
regarding fees and charges imposed by the fund complex and revenue sharing
arrangements entered into by the fund complex are set forth in the current
prospectus or other organizational or offering documents for each mutual fund.
Such documents are available upon request.
Client shall promptly notify Adviser of the sale of assets held in the
Account listed on Exhibit A. Adviser shall employ the Strategy with respect to
the assets in the Account until notified by the client in writing of the sale of
such assets.
6. Execution of Transactions by Adviser.
------------------------------------
a. Principal Transactions
Before the completion of any transaction in which the Adviser proposes
to act as principal, the Adviser will disclose to the Client the Adviser's
capacity as principal and will obtain the Client's consent to such principal
transaction.
b. Authorization of Agency Cross Transactions
Pursuant to Section 206(3) of the Investment Advisers Act of 1940 and
Rule 206(3)-2 promulgated thereunder, the Client authorizes the Adviser to
effect agency cross transactions for the Account and understands that with
respect to agency cross transactions the Adviser will act as broker for, and
receive commissions from, and have a potentially conflicting division of
loyalties and responsibilities regarding both parties to such transactions. The
Client may revoke this authorization at any time upon written notice to the
Adviser.
c. Authorization to Effect Transactions
If the Account is subject to Section 11(a) of the 1934 Act and Rule
11a2-2(T) thereunder (or any similar rule which may be adopted in the future),
it is agreed that, unless otherwise instructed by Client in writing, Adviser may
retain commissions in connection with effecting any securities transactions for
the Account. To the extent applicable, Adviser will furnish Client with all
reports required by law.
d. Rule 144 of the Securities Act of 1933 ("Rule 144")
With respect to transactions, including but not limited to any sales,
covered call writing programs, derivative strategies, or other transactions
contemplated herein, Adviser shall transact in such securities in compliance
with Rule 144. Client shall promptly give notice to Adviser of any information
it may have concerning any intended dispositions or deemed dispositions of any
securities which may be aggregated with or attributable to Client for Rule 144
purposes prior to such disposition or deemed disposition, which may include, but
not be limited to gifts, sales, hedging activities, or other transfers. In
addition, Adviser shall promptly give notice to Client of any actions taken by
the Adviser that may be aggregated with or attributable to Client for Rule 144
purposes prior to such disposition or deemed disposition, which may include, but
not be limited to gifts, sales, hedging activities, or other transfers.
Adviser shall make all necessary Rule 144 filings on behalf of Client
that are required by the Adviser's activities pursuant to this Agreement in such
manner as is required by Rule 144. Client shall promptly supply Adviser with all
information necessary for Adviser to complete such filings relating to the
Adviser's activities in a timely fashion. Client shall keep complete and
accurate records of the number of shares with respect to which Rule 144 filings
have been made and which Adviser has reported to the Client have been sold.
Client shall notify Adviser when Client believes that additional Rule 144
filings are required, so that Client and Adviser can coordinate on the filing by
Client of Rule 144 filings and the transactions by Adviser contemplated herein.
Notwithstanding anything to the contrary contained in this Agreement, if Adviser
in its sole discretion reasonably believes that it has insufficient information
necessary for Adviser to comply with Rule 144 and its filing obligations
hereunder, Adviser shall have full power and authority to not engage in any
transaction for which such filing may be necessary and to take any other action
or actions with respect to the Account assets that it reasonably determines to
be appropriate under the circumstances until it receives the requisite
information.
7. Authorization to Aggregate Orders and to Average Pricing.
--------------------------------------------------------
The Client hereby authorizes the Adviser to aggregate purchases and
sales of securities for the Account with purchases and sales of securities of
the same issuer for other clients of the Adviser occurring on the same day. When
transactions are so aggregated, the actual prices applicable to the aggregated
transaction will be averaged, and the Account will be deemed to have purchased
or sold its proportionate share of the securities involved at the average price
so obtained. Average pricing will be used in both agency and principal trades in
reported securities (those that are listed on an exchange or designated as
national market securities.)
8. Limit of Liability.
------------------
Client represents that (a) it recognizes the inherent market
fluctuation risks which surround the investment and reinvestment of assets; (b)
it is aware of the possible losses on the transactions in which Adviser will
engage for the Account, and it is financially capable of bearing such losses;
and (c) it has not received any written or verbal guarantees of performance of
the Account and understands that no representative or agent of Adviser is
authorized to make any such guarantees or representations now or in the future.
To the extent permitted by law, Adviser shall not be liable for any
error of judgment or for any loss suffered by the Client in connection with the
subject matter of this Agreement, except loss resulting from willful misconduct,
bad faith or gross negligence in the performance by Adviser of its duties, or by
reason of Adviser's reckless disregard of its obligations and duties under this
Agreement. Under certain circumstances, these laws may impose liabilities on
persons who act in good faith. Client expressly understands and agrees that
Adviser does not guarantee that a specific result will be achieved through
Adviser's management of the account.
Adviser shall not be responsible for any loss incurred by reason of any
act or omission of Client, the Custodian or any third party, other than any
third party controlled by, or under common control with, Adviser. Adviser shall
be fully protected in acting upon any instruction believed by it to be genuine
and signed or communicated by or on behalf of Client, and Adviser shall be under
no duty to make any investigation or inquiry regarding any Client instruction.
Adviser does not assume responsibility for the accuracy of information furnished
by Custodian or any third party on which it reasonably relies.
9. Fees.
----
As compensation for the services provided by the Adviser under this
Agreement, the Client will pay the Adviser a fee in accordance with the fee
schedule described in Exhibit D to this Agreement which may only be amended in
writing by the parties. This fee for the Adviser's services with respect to the
Account shall be paid by debiting the Account quarterly in arrears at the end of
each calendar quarter in accordance with the attached fee schedule. The initial
fee will be assessed pro rata in the event this Agreement becomes effective
other than as of the first of the calendar quarter based on the number of days
during the quarter the assets were held in the Account.
The fee includes payment for: (i) investment advisory services; (ii)
clearing and custodial services provided by Pershing LLC which shall include,
among other things, custody of the assets of the Account, crediting of interest
and dividends on the Account assets, crediting principal on called or matured
securities in the Account together with other custodial functions customarily
performed with respect to securities brokerage accounts; (iv) administrative
services such as the charging and collection of account fees and the processing
of deposits and withdrawals from the Account pursuant to the Client's
instructions; and (v) the issuance of quarterly reports.
To the extent that there is insufficient cash or cash equivalents in
the Account to cover the fee payable to Adviser in accordance with the fee
schedule described in Exhibit D of this Agreement, Adviser will send an advisory
fee calculation report to the Client. Client acknowledges that Custodian charges
interest on the debit balance in the Account until such balance is satisfied.
10. Reporting/Valuation.
-------------------
By arrangement with Pershing LLC, Adviser will provide Client with a
monthly statement for any month during which there is trading activity in the
Account and Adviser will also provide annual reports reflecting realized and
unrealized gains and losses in the Account.
Adviser will provide Client with a valuation report of the Account as
of the last day of each calendar quarter. The Account shall be valued in such
manner as shall be determined in good faith by Adviser to reflect fair market
value and the reports will reflect any information that Client shall request in
order to satisfy its oversight responsibility as Trustee. It is agreed that
Adviser, in the maintenance of its records, does not assume responsibility for
the accuracy of information furnished by the Client and its agents. Client
understands that this report shall not be used for tax reporting purposes.
Adviser will use its reasonable best efforts to obtain access to
custody information for the Accounts through an online interface.
11. Notice.
------
Any notice, instructions or other communications required or
contemplated by this Agreement shall be in writing and shall be addressed to the
recipient at the address first above written, except that either party may by
notice designate a different address for such party.
12. Termination.
-----------
This Agreement may be terminated by either party at any time upon 30
days' written notice to the other party, which notice shall be effective when
received by the other party. The termination of this Agreement shall not affect
any obligation or liability of the Client for any transaction entered into or
obligation incurred by the Client or on the Client's behalf prior to such
termination.
13. Assignment; Delegation.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors, heir and assigns; provided, however, that no "assignment"
of this Agreement (as such term is defined by the Investment Advisers Act of
1940 and the rules thereunder) shall be made by Adviser or Client without the
consent of the other party. Client understands that, as a result of this
provision, a transaction involving Adviser that does not result in a change in
the actual management or actual control of Adviser will not constitute an
assignment and thus, no Client consent need be obtained in the event of such a
transaction.
14. Confidentiality.
---------------
Pursuant to Regulation S-P adopted by the Securities and Exchange
Commission, all nonpublic personal information provided by the Client to Adviser
shall be held confidential by the Adviser; unless (i) the Adviser is authorized
in writing by the Client to disclose such information to individuals and/or
entities not affiliated with the Adviser; (ii) required to do so by judicial or
regulatory process; (iii) it is necessary to carry out the purpose of this
Agreement; or (iv) otherwise permitted to do so in accordance with the
parameters of Regulation S-P. All recommendations, advice or other work product
of the Adviser developed under the terms of this Agreement and disclosed to the
Client shall be treated as confidential, except as required by law to be
disclosed.
15. Construction; Governing Law.
---------------------------
Headings used in this Agreement are for convenience only, and shall not
affect the construction or interpretation of any of its provisions.
This Agreement shall be interpreted and construed in accordance with
the internal substantive laws (and not the choice of law rules) of the State of
New York. All actions and proceedings brought by either Party relating to or
arising from, directly or indirectly, this Agreement shall only be litigated in
courts located within the State of New York. The Parties hereby submit to the
personal jurisdiction of such courts; hereby waive personal service of process
upon it and consent that any such service of process may be made by certified or
registered mail, return receipt requested, directed to it at its address last
specified for Notices hereunder, and service so made shall be deemed completed
five (5) days after the same shall have been so mailed; and hereby waive the
right to a trial by jury in any action or proceeding with the other Party.
16. Non-Waiver of Rights.
--------------------
Nothing herein shall in any way constitute a waiver or limitation of
any rights that Client may have under applicable federal or state laws.
17. Entire Agreement; Amendment.
---------------------------
This Agreement is the entire agreement between the parties as to the
subject matter covered herein and supersedes all prior agreements and
understandings of the parties in connection therewith. If there is any
inconsistency or conflict between this Agreement and any other agreement between
Adviser and Client relating to the Account, the terms and provisions of this
Agreement shall control. If any provision of this Agreement shall be held or
made invalid by statute, rule, regulation, decision of a tribunal or otherwise,
the remainder of this Agreement shall not be affected and, to this extent, the
provisions of this Agreement shall be deemed to be severable. This Agreement may
not be modified or amended except in a writing signed by the parties.
18. Disclosures.
-----------
a. The Adviser shall not be liable hereunder for any failure
to recommend the purchase or sale of any security on behalf of the Client when,
in the Adviser's opinion, such transaction (i) may be contrary to policies and
procedures applicable to the Adviser, including those policies and procedures
designed to avoid the misuse or appearance of misuse of nonpublic information;
or (ii) may constitute a violation of any federal or state law, rule or
regulation or a breach of any fiduciary or confidential relationship between
Adviser or any of Adviser's officers or employees and any other person or
persons.
b. The Client understands that the Adviser's investment
banking division is the regular investment banker for a number of major
corporations and, from time to time, performs investment banking services for
other companies as well. The Adviser believes that the nature and range of
clients to whom it renders such investment banking services is such that it
would be inadvisable to exclude these companies from the Account's portfolio.
Accordingly, unless the Client instructs the Adviser to the contrary, it is
likely that the Client's holdings will include the securities of corporations
for whom the Adviser performs investment banking services. Moreover, the
Client's portfolio may include the securities of companies in which the Adviser
or its officers or employees have positions, long or short.
c. The Client understands that the Adviser's opinions,
recommendations and actions will be based on information deemed by the Adviser
to be reliable, but not guaranteed to or by the Adviser. The Client agrees that
the Adviser shall not in any way be liable for any error in judgment or any act
or omission, provided that the Adviser acts in good faith, except as may be
otherwise provided in applicable federal and state securities laws.
d. The Client understands that the Adviser in performance of
its obligations and duties under this Agreement is entitled to rely upon the
accuracy of information furnished by Client or on the Client's behalf, without
further investigation.
e. The Client agrees that the Adviser will not be liable for
any losses, costs or claims resulting from the Client's failure to notify the
Adviser pursuant to paragraph 1 of this Agreement of any modifications or
amendments to the Investment Guidelines or the Trust.
f. The Client understands that the Adviser and/or its
directors, officers and employees handles accounts for, and renders investment
advice and other investment management and broker-dealer services to other
investors and institutions with respect to, and it may for its own account hold,
purchase, sell or otherwise trade in and deal with securities which are the same
as or similar to those which the Adviser purchases, sells, or otherwise trades
in for the Investment Account, and that the same security will not always be
bought or sold at the same price for each account. The Adviser shall be in all
respects free to take action with respect to investments in securities for the
Investment Account which is the same as or different from the action taken by it
and/or any of the above-mentioned persons in handling such other accounts or
rendering such other investment management or broker-dealer services or with
respect to its or their investments in Securities. To the extent practicable, it
is the Adviser's policy to allocate investment opportunities to the Investment
Account over a period of time on a fair and equitable basis relative to other
investors and institutions.
19. Counterparts.
------------
This Agreement may be executed in one or more counterparts each of
which when executed and delivered shall be an original and both counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the first date written above.
THE CLIENT ACKNOWLEDGES RECEIVING A COPY OF THIS AGREEMENT.
PITCAIRN TRUST COMPANY, Trustee of the 2006 EEM Volaris Trust
By:
------------------------------------------------
Name:
Title:
CREDIT SUISSE SECURITIES (USA) LLC
----------------------------------------------------
Branch Manager
----------------------------------------------------
Managing Director
Exhibit G
THE 2006 C.V. STARR VOLARIS TRUST
THIS TRUST AGREEMENT (this "Agreement") is entered into on the 7th day of
March, 2006, by and between C.V. Starr & Co., Inc., a Delaware corporation
(the "Settlor"), and Pitcairn Trust Company, a Pennsylvania corporation (the
"Trustee").
W I T N E S S E T H:
--------------------
FIRST: Name of Trust
----- -------------
This Trust shall be known as the 2006 C.V. Starr Volaris Trust (the
"Trust").
SECOND: Trust Property
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The Settlor hereby transfers, delivers and conveys to the Trustee all
of the Settlor's right, title and interest in and to the property set forth in
Schedule A, and the Trustee acknowledges receipt of such property, IN TRUST,
and agrees to hold, administer and distribute such property, as well as any
other property that may later become subject to this Trust under the terms and
conditions set forth below.
The trust property to which the provisions hereof shall apply shall
include not only the property set forth in Schedule A but also any other
property acceptable to the Trustee which the Settlor may hereafter add during
the Trust term and that may later become subject to this Trust, for the
purposes and on the terms and conditions set forth herein.
THIRD: Trust Purpose
----- -------------
Notwithstanding any other provision herein, the Settlor intends to avoid
any conflict of interest or appearance thereof that may arise from the
Settlor's duties and powers as a shareholder up to the date of this Agreement
of American International Group, Inc. (the "Issuer") in exercising any
investment decisions with regard to shares of the Issuer. In furtherance
thereof, the Settlor hereby creates this Trust, the primary purpose of which
is to entrust to the Trustee the authority (within the terms herein,
including, without limitation, the remaining provisions of this Article THIRD)
to make all decisions and effectuate all decisions as to when and to what
extent any transactions are effected with regard to any assets transferred to
the Trust, including any Issuer stock transferred hereto (the "Shares"), in
all instances without any participation in or knowledge of such decisions by
the Settlor, the Settlor's successors-in-interest or any officer, director,
shareholder or other person whose relationship to the Settlor or the Issuer
gives such person access, directly or indirectly, to material information
about the Issuer that is not generally available to the public (an "Interested
Party"), subject to the provisions hereof. Although the Trustee shall have
full discretion, the Settlor directs that the Trustee enter into a contract
with Credit Suisse Securities (USA) LLC substantially in the form of Schedule
B, attached hereto, under which the Trustee will retain Credit Suisse
Securities (USA) LLC to extract returns from the trust's assets identified in
such contract based on stock market volatility, utilizing (i) a low risk
tolerance strategy (as defined in Exhibit B of such contract) when Issuer
common stock has a market price below ninety dollars ($90) per share and (ii)
a medium risk tolerance strategy (as defined in Exhibit B of such contract)
when Issuer common stock has a market price equal to or greater than ($90) per
share. Should such contract terminate for any reason, the Settlor directs the
Trustee to enter into a substantially similar contract with another investment
manager (each investment manager under this agreement, including Credit Suisse
Securities (USA) LLC, hereinafter referred to as the "Adviser" and each
investment manager contract hereinafter referred to as the "Adviser
Contract"). Furthermore, the Settlor relieves the Trustee of all
responsibility for managing the underlying assets and hereby limits the
Trustee's responsibility to oversight of the Adviser. The Settlor authorizes
the Trustee to rely solely on statements provided by the Adviser to fulfill
its oversight responsibilities as Trustee. The Settlor acknowledges and agrees
that the Settlor and/or its legal and financial representatives and advisers,
has received, reviewed and understands (i) the disclosures, including, without
limitation, the risk disclosures relating to the Strategy (as defined in the
Adviser Contract); (ii) a copy of Part II of the Adviser's Form ADV; (iii) a
copy of the document entitled Characteristics and Risks of Standardized
Options, and understands that the Adviser shall provide a current copy of such
document on request; and (iv) the Risk Disclosure Statement Concerning
Derivatives attached as Exhibit C to the Adviser Contract.
FOURTH: Trust Administration
------ --------------------
(a) The Trustee shall collect the income from the trust property and
shall hold any cash, whether income or principal, received by the Trust in
cash or cash equivalents. The Trustee shall pay to the Settlor the amount of
any cash and cash equivalents on hand to the extent that the value of such
cash and cash equivalents shall be greater than five percent (5%) of the fair
market value of the Shares, measured at the end of each calendar quarter using
for valuation purposes the last sale price as reported on the last trading day
on or prior to the end of such quarter, such payment to be made within thirty
(30) days thereof, provided, however, that the Trustee may, in its absolute
discretion, withhold the payment of any such cash or cash equivalents as a
reserve for any cash requirements of the trust, including any fees, expenses
or other liabilities. The Trustee may pay from time to time so much of the
balance of the net income and principal, including to the extent of all
thereof, to or for the benefit of the Settlor; provided, however, that the
Trustee shall not distribute (other than pursuant to Article FIFTH herein) any
Shares to the Settlor unless otherwise permitted under this Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, the
Trustee shall distribute all net income of the trust during the life of the
Settlor to, and only to, the Settlor or the Settlor's successors-in-interest,
which income shall be so distributed no later than as soon as practicable
after the end of each calendar year, if and to the extent that the Settlor so
directs, and all amounts distributable under this Agreement during the
Settlor's life shall be distributed only to the Settlor or the Settlor's
successors-in-interest.
(c) For purposes of this Article FOURTH, "income" shall include income
from all sources, regardless of whether characterized for other purposes as
principal or income including, without limitation, income generated with
respect to call options and/or other derivative securities.
FIFTH: Trust Termination
----- -----------------
Upon the earliest to occur of (a) the Settlor's dissolution, (b) the
occurrence of an event described in Article EIGHTEENTH, or (c) written notice
to the Trustee from the Settlor or the Settlor's duly appointed guardian or
fiduciary, or an agent under a power of attorney revoking or ordering the
termination of this Trust (in any case, the "Termination Date"), the Trustee
shall distribute the principal (and income, to the extent not previously
distributed) as then constituted to anyone previously designated by the
Settlor in writing, including the Settlor or the Settlor's
successors-in-interest, or, in default of the exercise of such general power
of appointment, to the Settlor or the Settlor's successors-in-interest.
SIXTH: Amendments
----- ----------
This Trust can be amended at any time or from time to time by the
Trustee, but only if the Trustee is advised by the Trustee's or the Settlor's
securities counsel in writing that such amendment is necessary or desirable,
and then only to the extent so necessary or desirable (a) to assure that the
Trust and the sale of the Shares, writing, settling and rolling of call
options with regard to the Shares, or any other derivative strategy
effectuated by the Trustee or its investment adviser relating to the Shares
are consistent with (i) then applicable securities laws, regulations or
administrative policies or interpretations, and (ii) any responsibility that
the Trustee, Adviser or the Settlor may have thereunder or (b) to avoid
unanticipated liability of the Settlor, Trust, Trustee or Adviser thereunder.
If the Trustee intends to amend the Trust pursuant to this Article SIXTH, it
shall notify the Settlor in writing at least three business days before the
effective date of such amendment.
SEVENTH: General Powers of the Trustee
------- -----------------------------
In addition to any powers granted specifically or generally to the
Trustee as provided by law, and in addition to every power and discretion
conferred upon the Trustee by any provision hereof, the Settlor confers upon
the Trustee the express powers set forth in this Article to be exercised by
the Trustee in its sole discretion with respect to all property at any time
coming into its hands, whether principal or income and whether by purchase or
otherwise but at all times in accordance with Article THIRD:
(a) To take any actions with respect to transactions in the Shares for so
long as the Shares are held as an asset of the Trust; and hold the Shares in
the Trust, sell all or some of the Shares from time to time, write and roll
equity, index and over-the-counter covered calls and use call options and/or
other derivative strategies to generate income, manage risk, and facilitate
exit strategies for the account of the Settlor, provided that such action is
not in violation of any applicable laws;
(b) To own, hold and possess such other securities and interests in the
Issuer or other entities, either publicly or closely held, as part of or as
all of the Trust assets for the entire Trust term, and continue to invest the
principal of the Trust as then constituted in any such securities or interests
as the Trustee in its discretion deems appropriate. The Trustee shall not be
liable for any loss resulting from the retention of the Shares, or such
securities or interests as part of or as all of the assets of the Trust. The
Trustee shall have the power to retain the Shares and such securities or
interests, notwithstanding any applicable law relating to the investment of
trust assets, including any laws requiring diversification of trust assets;
(c) With respect to any stock or other securities forming part of this
Trust, to exercise all voting rights, either in person or by proxy; exercise
conversion, subscription, option and similar rights; enter or refuse to enter
any dissolution, liquidation, consolidation, recapitalization, reorganization,
merger or other change in capital structure, and in connection therewith, make
exchanges of stock or other securities and enter into agreements on such terms
and conditions as the Trustee may deem advisable; including without
limitation, the deposit of any property with any protective, reorganization or
similar committee, the delegation of discretionary powers thereto, the sharing
in the payment of its expenses and compensation and the payment of any
assessments levied with respect to such property; receive and retain property
under any such plan whether or not the same is of a class in which fiduciaries
are authorized by law to invest trust funds, and enter into voting trusts and
agreements with other stockholders, and other holders of securities, or any
one or more so such person, for such purposes and for such period of time
(whether or not the same extends beyond the actual or probable duration of any
trust created hereunder), and upon such terms and conditions as the Trustee
shall deem advisable, provided, however, that notwithstanding the foregoing or
any other provision of this Trust, the Trustee shall have full and absolute
discretion with respect to the exercise of all voting rights, such discretion
to include, without limitation, the authority to vote in accordance with any
recommendation, to Issuer securityholders generally, of any independent third
party, including Institutional Shareholder Services, Inc;
(d) To invest in mortgage participations, shares of investment trusts and
regulated investment companies, including those controlled by any investment
advisor or investment counsel employed by the Trustee, mutual funds, money
market funds and index funds that may be acquired by prudent investors;
(e) To hold securities, including stock of the Issuer, or other property
in the Trustee's name as the Trustee under the Trust, in the Trustee's own
name or in the name of a nominee; or the Trustee may hold securities
unregistered in such condition that ownership will pass by delivery;
(f) To make executory contracts and grant options for any period and for
any purpose;
(g) To buy and trade in securities and other financial instruments of any
nature; buy and sell (covered or uncovered) equity, index and over-the counter
options and otherwise deal in puts and calls; and to maintain and operate
margin accounts and other accounts with brokers as security for loans and
advances made to the Trustee; in particular, the Trustee is specifically
authorized to sell securities to cover any of the Trust's expenses;
(h) To prosecute, defend, contest or otherwise litigate, at the expense
of the Trust, legal actions or other proceedings for the protection or benefit
of the Trustee or Trust. The Trustee shall further have the power to pay,
compromise, release, adjust or submit to arbitration any debt, claim or
controversy against or in favor of the Trust, as long as the Trustee
reasonably believes that such action will be beneficial to the Trust;
(i) To carry, at the expense of the Trust, insurance of such types and in
such amounts as the Trustee may deem advisable to insure the trust assets
against any loss or damage and protect the Trustee against third party
liability;
(j) To employ and pay the fees of, at the expense of the Trust, through
the sale of trust assets if necessary, agents, experts, accountants, counsel,
investment advisors, custodians, brokers, and others (including the Trustee,
its successor or any affiliate) and delegate discretionary powers (including
investment functions) to, and rely upon information and advice furnished by
such agents, experts, accountants, counsel, investment advisors, custodians,
brokers and others in connection with issues specific to the Trust, the
Settlor or the trust estate in connection with the Trustee's management,
administration and protection of the trust estate; and
(k) To release or to restrict the scope of any power that the Trustee may
hold in connection with the Trust hereunder, whether such power is expressly
granted in this instrument or implied by law. The Trustee shall exercise this
power in a written instrument executed by the Trustee and delivered to the
Settlor, specifying the power(s) to be released or restricted and the nature
of the restriction.
EIGHTH: Successor Trustees
------ ------------------
(a) If the Trustee shall for any reason cease to act as the Trustee of
the Trust, the Trustee shall promptly notify the Settlor of such occurrence
and such person(s) as the Settlor shall appoint in writing shall act as the
Trustee(s); provided, however, any successor Trustee appointed as hereinabove
provided may not be the Settlor or any other Interested Party. All
appointments of successor Trustee(s) shall be exercised in writing, duly
acknowledged and shall be effective upon the written acceptance of the
successor Trustee delivered to the Settlor.
(b) Any successor Trustee shall succeed as the Trustee of the Trust with
like effect as though originally named the Trustee under this instrument. All
authority, powers and discretions conferred on the original Trustee under this
instrument shall pass to any successor Trustee.
(c) No bond or other security shall be required of any Trustee named
herein, or appointed as hereinabove provided, for the faithful performance of
such Trustee's duties in any state or other jurisdiction.
NINTH: Trustee Compensation
----- --------------------
The Trustee shall be entitled to receive compensation for its services
for acting in any fiduciary capacity under this instrument in accordance with
Schedule C attached hereto and incorporated by reference herein.
TENTH: Trustee Resignation
----- -------------------
The Trustee may resign as the Trustee hereunder at any time without leave
of the Court by giving written notice to the Settlor. The resignation shall
become effective on the acceptance of the Trusteeship by the successor
Trustee(s) designated pursuant to Article EIGHTH hereof. Upon the written
acceptance(s) by the appointed successor Trustee(s), and duly acknowledged
receipt and release of the Settlor, the resigning Trustee shall (i) promptly
deliver all trust assets in its possession to the successor Trustee(s), (ii)
execute all documents and (iii) do all such things as may be necessary
therefor.
ELEVENTH: Trustee Removal
-------- ---------------
The Settlor may remove any acting Trustee, with or without cause, by
giving written notice to the Trustee, and one or more successors thereto shall
be appointed in accordance with Article EIGHTH hereof. Upon the written
acceptance(s) by the appointed successor Trustee(s), and duly acknowledged
receipt and release of the Settlor, the removed Trustee shall (i) promptly
deliver all trust assets in its possession to the successor Trustee(s), (ii)
execute all documents and (iii) do all such things as may be necessary
therefor.
TWELFTH: Trustee Liability
------- -----------------
(a) A successor Trustee shall not be responsible for the acts or
omissions of any prior Trustee.
(b) The original Trustee shall not be liable to the Settlor or the
Settlor's successors-in-interest for any act, omission or default of the
Trustee, including but not limited to exercising voting rights as provided
under clause (c) of Article SEVENTH hereof , in its complete discretion, or of
any other person, except by reason of the Trustee's acting in bad faith,
willful misconduct or gross negligence.
(c) The Trust, the Settlor or the Settlor's successors-in-interest shall
indemnify the Trustee to the fullest extent permitted by law, and shall save
and hold the Trustee harmless from and in respect of all fees, costs and
expenses incurred, including attorneys' fees, in connection with or resulting
from any claim, action or demand against (or threatened against) the Trust or
the Trustee, which arise out of or in any way relate to the Trust or the trust
estate, or the performance of the Trustee's duties under this instrument,
including but not limited to following the income extraction program as
described under Article THIRD hereof, and all such claims, actions and demands
and any losses or damages resulting therefrom, including amounts paid in
settlement or compromise of any such claim, action or demand; provided,
however, this indemnity shall not extend to conduct by the Trustee that is
adjudged to constitute bad faith, willful misconduct or gross negligence.
(d) Except to the extent any liability, loss or depreciation results from
the Trustee's bad faith, willful misconduct or gross negligence, (i) the
Settlor or the Settlor's successors-in-interest shall indemnify and hold the
Trustee harmless from any and all liability resulting from the exercise or
non-exercise of its discretion to engage in or disengage from any program
designed to diversify or increase the return on the Issuer's common stock,
(ii) the Trustee shall not be responsible for any loss or depreciation in
value of any property authorized to be retained or acquired and (iii) the
judgment of the Trustee with respect to the exercise of its discretion shall
be binding and conclusive upon all persons who are beneficiaries or otherwise
interested parties to this Trust.
(e) Unless resulting from the Trustee's bad faith, willful misconduct or
gross negligence, and upon satisfaction of the conditions set forth herein
with respect to each such action, every election, determination or other
exercise of discretion by the Trustee with respect to the retention,
disposition or acquisition of any trust assets shall be deemed to have been
made with reasonable care, prudence and diligence by the Trustee.
THIRTEENTH: Adviser Liability
---------- -----------------
(a) The Adviser shall not be liable to the Settlor, the Trustee or the
Settlor's successors-in-interest, for any act, omission or default of the
Adviser or of any other person, except by reason of the Adviser's acting in
bad faith, willful misconduct or gross negligence.
(b) The Trust, the Settlor or the Settlor's successors-in-interest shall
indemnify the Adviser to the fullest extent permitted by law, and shall save
and hold the Adviser harmless from and in respect of all fees, costs and
expenses incurred, including reasonable attorneys' fees, in connection with or
resulting from any claim, action or demand against (or threatened against) the
Trust or the Adviser, which arise out of or in any way relate to the Trust or
the trust estate, or the performance of the Adviser's duties hereunder or
under the Adviser Contract, including but not limited to following the
investment program referred to in Article THIRD hereof, and all such claims,
actions and demands and any losses or damages resulting therefrom, including
amounts paid in settlement or compromise of any such claim, action or demand;
provided, however, (1) this indemnity shall not extend to conduct by the
Adviser that is adjudged by a court of appropriate jurisdiction to constitute
bad faith, willful misconduct or gross negligence by the Adviser, (2) the
Adviser shall provide written notice to the Trustee and Settlor of any such
claim, action or demand relating to such indemnification, and (3) the
settlement or compromise of any such claim, action or demand shall be approved
in writing by the Settlor, which consent shall not be unreasonably withheld.
(c) Except to the extent any liability, loss, depreciation or the
Adviser's judgment results from the Adviser's bad faith, willful misconduct or
gross negligence, (i) the Settlor or the Settlor's successors-in-interest
shall indemnify and hold the Adviser harmless from any and all liability
resulting from the exercise or non-exercise of its discretion to engage in or
disengage from any program designed to diversify or increase the return on the
Issuer's common stock, (ii) the Adviser shall not be responsible for any loss
or depreciation in value of any property authorized to be retained or acquired
and (iii) the judgment of the Adviser with respect to the exercise of its
discretion shall be binding and conclusive upon all persons who are
beneficiaries or otherwise interested parties to this Trust.
(d) Unless resulting from the Adviser's bad faith, willful misconduct or
gross negligence, and upon satisfaction of the conditions set forth herein
with respect to each such action, every election, determination or other
exercise of discretion by the Adviser with respect to the retention,
disposition or acquisition of any trust assets shall be deemed to have been
made with reasonable care, prudence and diligence by the Adviser.
FOURTEENTH: Statements of the Trustee
---------- -------------------------
A. The Trustee shall generate general account summary information each
calendar quarter and may provide to Settlor more detailed statements of
account activity from time to time, subject to Article SIXTEENTH hereof.
Statements shall be provided no earlier than the earlier of (i) 90 days from
the date of the statement and (ii) the last expiration date of open positions
listed on such statement.
B. A successor Trustee may accept as correct any statements of trust
assets made by any predecessor Trustee; and no successor Trustee shall have
any duty to take action to obtain redress for breach of trust committed by any
predecessor Trustee, unless requested in writing by a person having a present
or future beneficial interest in the Trust. A successor Trustee, however, may
institute any action or proceeding for the settlement of the statements, acts
or omissions of any predecessor Trustee.
FIFTEENTH: Grantor Trust Status
--------- --------------------
The Settlor intends that the Trust shall be taxed as a "grantor trust"
pursuant to Section 676 of the Internal Revenue Code of 1986, as amended. The
Trustee shall file any required income tax, information and other returns for
the Trust promptly after the close of each taxable year of the Trust (or, if
earlier, as required by applicable law) and shall timely provide the Settlor
with only such information as shall be necessary to enable the Settlor to
timely file its federal, state and local income tax, information and other
returns with respect to its interest in the Trust or as otherwise required by
applicable law. The Trustee is hereby authorized to make an election under
Regulation ss. 1.671-4(b)(2)(i)(A) to use the Settlor's tax identification
number if such election can be made under applicable law. If such an election
is made, the Trustee shall provide the Settlor with the information required
by Regulation ss. 1.671-4(b)(2)(ii). Upon Trustee's request the Settlor shall
provide the Trustee with the completed IRS Form W-9 (or any successor
thereof). Any tax advice or services required by the Trust, or the Trustee
with respect to the Trust, shall be provided, at the expense of the Trust, by
a firm authorized by the Settlor from time to time, and any filing with any
tax authority on behalf of the Trust, or the Trustee with respect to the
Trust, shall require the prior consent of the Settlor. The tax advisor
initially authorized by the Settlor shall be the firm of Kronish Lieb Weiner &
Hellman LLP.
SIXTEENTH: Blind Trust between the Settlor and the Trustee
--------- -----------------------------------------------
A. Prohibition on Direct or Indirect Communications. Except as otherwise
specifically provided in this Agreement, the Settlor and the Trustee shall not
communicate, directly or indirectly, about the Shares or other securities in
the Issuer.
B. Limitation on Equity Ownership. In no event shall the Settlor place in
the Trust securities that, when aggregated with any securities of the same
issuer already held in the Trust, would represent beneficial ownership equal
to or greater than 10% of the outstanding equity securities of a corporation
or other entity (including the Issuer) if such class of securities is
registered under Section 12 of the Exchange Act.
C. Compliance with Rule 144. With respect to transactions, including but
not limited to, any sales, covered call writing programs, derivative
strategies, or other dispositions by the Trustee with regard to the Shares,
the Trustee shall transact in such securities in compliance with Rule 144 of
the Securities Act of 1933, as amended ("Rule 144") and make, or cause a third
party, including any Adviser, to make, such filings as required. The Settlor
shall promptly give notice to the Trustee of any intended disposition or
activity that may be deemed a disposition of any of the Issuer's securities
held by the Settlor, the Settlor's successors-in-interest or any other person
or entity, including deemed dispositions pursuant to benefit plans, whose
transactions in the Issuer's securities may be aggregated with or attributable
to the Settlor, prior to such disposition or deemed disposition, which may
include, but not be limited to gifts, sales, hedging activities, or other
transfers. Such intended disposition or deemed disposition shall only take
place if approved in writing by the Trustee if in the Trustee's sole
discretion such disposition or deemed disposition is not in conflict with the
Trustee's actions required or allowed under this Trust and Rule 144. Also, to
facilitate any Rule 144 filings required to be made by the Settlor upon such
disposition or deemed disposition, the Trustee shall supply the Settlor with
the information required to be completed on such filing relating to the
Trust's activities. In accepting any securities, the Trustee may rely on the
Settlor's representation that such transfer will comply with the limitations
provided in this paragraph.
D. Compliance with Section 16 by the Settlor. The Settlor shall comply
with any and all reporting requirements under Section 16 of the Exchange Act
upon the transfer of any assets to the Trust or back to the Settlor, including
filing all Form 4's and Form 5's required by applicable Exchange Act rules. To
facilitate such compliance, the Trustee shall notify the Settlor and the
Settlor's designated representatives of all transactions effected by the Trust
that may be reportable under Section 16(a) of the Exchange Act not later than
one day after initiating each such transaction. In addition, the Settlor will
promptly provide to the Trustee a list of all transactions reportable under
Section 16(a) of the Exchange Act executed within seven (7) months previous to
the date hereof by the Settlor or anyone whose activities may be attributed to
the Settlor, including transactions that are exempt from Section 16(b) of the
Exchange Act.
E. Investment Control by the Settlor. The Settlor and the Trustee
acknowledge and agree that the Settlor does not have or share and will not
exercise authority or control over, nor will attempt to influence in any way
the Trustee's decisions that directly or indirectly affect the acquisition or
disposition of any options, derivative securities or other securities of the
Issuer or relating to the Issuer or the Issuer's securities by the Trust,
including decisions to continue to hold an investment ("Investment
Decisions").
F. No Voting Control by the Settlor. The Settlor and the Trustee
acknowledge and agree that the Settlor does not have or share and will not
exercise authority or control over, nor will attempt to influence in any way,
the Trustee's decisions relating to the voting of the Shares (or any decision
to refrain from voting on a matter) or the giving of a proxy with respect
thereto ("Voting Decisions").
G. No Solicitation of Advice by the Trustee. The Trustee acknowledges and
agrees that it will not under any circumstances request from any Interested
Party, directly or indirectly, any information, regardless of its form, which
may be written, oral, electronic "soft copy" or any other form used to
communicate, concerning, without limitation, the results of operations,
financial condition, technology, research and development activities,
employees, officers, directors, business or prospects of the Issuer or any
other information that could materially influence an Investment Decision or a
Voting Decision ("Advice"). The foregoing notwithstanding, the Settlor and the
Trustee agree and understand that the Trustee, as part of keeping itself fully
informed regarding the Issuer in particular and regarding its industry segment
and the market in general, may participate in analyst calls and other public
communications from the Issuer irrespective of whether the Settlor or any
other Interested Party serves as the spokesperson for the Issuer during the
course of such public communications and further, that participating in such
analyst calls and other public communications and communications with or on
behalf of the Issuer will not be deemed a violation of the Trust, or the
Trustee's duties hereunder. The parties acknowledge and agree that the
restrictions on the "Trustee" in this clause G shall be deemed to apply solely
to the employees of the trust department of any corporate Trustee responsible
for administering this Trust and not to the Trustee in its corporate capacity
generally, in its capacity as a service provider outside of its trust
department, or in its capacity as a service provider to other accounts within
its trust department.
H. No Provision of Advice by the Settlor. The Settlor acknowledges and
agrees that under no circumstances, whether directly or indirectly, will it
provide any Advice to the Trustee or to any other person associated with
Investment Decisions or Voting Decisions with respect to the Shares. The
Settlor and the Trustee further acknowledge and agree that, should the Settlor
be approached by any of the foregoing persons seeking to engage in a dialogue
(oral or written) concerning any subject that might have a possible bearing on
an Investment Decision or a Voting Decision, the Settlor will inform the other
person involved in the dialogue of the obligations of the parties hereunder,
and will refrain from providing any Advice during the course of any such
dialogue. Without limiting the foregoing, the Settlor specifically agrees that
it will not provide to the Trustee or its agents or associates any material
non-public information it has obtained from any source regarding the Issuer.
I. Material non-public information. The Trustee represents that the
employees of the Trustee administering the Trust have no material non-public
information about the Issuer and shall not execute any transactions in the
Trust property while in possession of such information. The parties
acknowledge and agree that the restrictions on the "Trustee" in this clause
shall be deemed to apply solely to the employees of the trust department of
any corporate Trustee responsible for administering this Trust and not to the
Trustee in its corporate capacity generally, in its capacity as a service
provider outside of its trust department, or in its capacity as a service
provider to other accounts within its trust department. In addition, the
parties agree that the transactions by the Trustee in the Trust property
contemplated hereunder are independent of any other transactions that Settlor
may or may not take with respect to securities of the Issuer or otherwise.
SEVENTEENTH: Situs of the Trust
----------- ------------------
This Agreement shall be construed in accordance with the custom and usage
prevailing in, and be regulated by the laws of the Commonwealth of
Pennsylvania. As long as the Trust is a Pennsylvania trust, the law governing
the administration of the Trust shall be controlled by Pennsylvania law. If
Trustee proposes to effect any change that would cause the Trust to cease to
be a Pennsylvania trust, it shall notify Settlor at least ten days in advance
of effecting such change. This Article shall apply regardless of any change of
residence of Trustee, or any beneficiary, or the appointment or substitution
of a Trustee residing or doing business in another state.
EIGHTEENTH: Severability of Provisions
---------- --------------------------
If any provisions of this instrument are declared invalid or
unenforceable, the remaining provisions shall nevertheless be carried into
effect; provided, however, that the parties acknowledge that a principal
purpose of the transactions effectuated by the Trust is that the transactions
not be attributable to the Settlor for purposes of Section 16 of the Exchange
Act and, if any provision of this Agreement that is necessary or advisable for
such purpose is declared by a court of appropriate jurisdiction to be invalid
or unenforceable, then this Trust will terminate.
NINETEENTH: Loans
---------- -----
The Trustee has the power upon any terms, including on a recourse or
non-recourse basis, to borrow money from any person, including itself, its
successor or any affiliate or any Adviser, in an amount up to ten (10%)
percent of the trust assets, valued as of the date of such loan, to be secured
by the trust assets, for any lawful purpose and to pledge assets as security
for repayment. The Trustee, in its corporate capacity, is also authorized, in
its sole discretion, to lend to the Settlor up to the maximum amount permitted
by law, which loans to the Settlor shall be full recourse against the Settlor.
TWENTIETH: Execution in Counterparts
--------- -------------------------
This Agreement may be executed via facsimile, in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
TWENTY-FIRST: Sole Agreement
------------ --------------
All prior understandings, agreements, representations and warranties,
oral or written, between the Settlor and the Trustee are merged in this
instrument.
TWENTY-SECOND: Successors
------------- ----------
This instrument shall be binding upon and inure to the benefit of the
parties hereto, their successors, heirs, executors, and administrators.
IN WITNESS WHEREOF, the Settlor and the Trustee have duly executed this
agreement as of the 7th day of March, 2006.
SETTLOR:
C.V. STARR & CO., INC.
By: /s/ Edward E. Matthews (SEAL) /s/ Bertil P-H Lundqvist
----------------------------- ---------------------------------
Name: Edward E. Matthews WITNESS
Title:
TRUSTEE:
PITCAIRN TRUST COMPANY
By: /s/ Averill R. Jarvis ATTEST: /s/ Denise L. Wallace
----------------------------- ----------------------------------
Name: Averill R. Jarvis Ass't. Sec'y.
Title: Senior Vice President
ACKNOWLEDGMENT OF SETTLOR
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On March 7, 2006 before me, Lynne E. Harrison the undersigned, personally
appeared Edward E. Matthews personally known to me or provide to me on the
basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same
in his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted executed
the instrument.
(SEAL)
/s/ Lynne E. Harrison
---------------------------------
Notary Public
ACKNOWLEDGMENT OF TRUSTEE
COMMONWEALTH OF PENNSYLVANIA )
) SS.:
COUNTY OF MONTGOMERY )
On March 9, 2006 before me, Christina L. Pastor the undersigned,
personally appeared Averill R. Jarvis personally known to me or provide to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted executed the
instrument.
/s/ Christina Pastor
-----------------------------------
Notary Public
(SEAL)
Exhibit H
CREDIT SUISSE SECURITIES (USA) LLC
VOLARIS VOLATILITY MANAGEMENT
DISCRETIONARY INVESTMENT MANAGEMENT
AGREEMENT FOR BLIND TRUSTS
This Investment Management Agreement is entered into this ____ day of
March, 2006 by and between CREDIT SUISSE SECURITIES (USA) LLC, a Limited
Liability Company, having its principal place of business at 11 Madison
Avenue, New York, NY 10010 ("Adviser") and Pitcairn Trust Company, a
Pennsylvania Corporation, with an address at 165 Township Line Rd Ste 3000,
Jenkintown, PA 19046 as Trustee of the 2006 C.V. Starr Volaris Trust (the
"Client").
Whereas, Adviser designs and monitors an option overlay and spreading
strategy that seeks to enhance returns and reduce volatility (the "Strategy");
and
Whereas, the assets identified on Exhibit A hereof are held in an account
(the "Account") established at and cleared and custodied with the Adviser;
Whereas, the Client wishes to engage the Adviser to act as a
discretionary investment adviser to the Client implementing the Strategy with
respect to the assets of the Account;
Now, therefore, Client and Adviser agree as follows:
1. Appointment of Adviser.
Client appoints Adviser as discretionary investment adviser for the
assets of the Account listed in Exhibit A attached hereto with full power and
authority to supervise and direct the investments of and for the Account in
conjunction with implementation of the Strategy without prior consultation
with Client. Client has elected the Strategy in accordance with direction from
the Settlor of the 2006 C.V. Starr Volaris Trust.
Adviser's investment decisions and advice for the Account shall be in
accordance with (i) the investment objectives and guidelines for the Account
as described in Exhibit B attached hereto ("Investment Guidelines"), (ii) the
Trust Agreement, (iii) any written instructions provided by Client to Adviser
and (iv) the information on the New Account Form executed by Client which is
incorporated by reference. It shall be the responsibility of Client to advise
Adviser in writing of any changes to any of the referenced documents.
Adviser is hereby appointed Client's agent with full power and authority
with respect to the Account assets: (a) to purchase or sell options in
accordance with the Investment Guidelines; (b) to execute transactions for the
Account itself and/or with one or more securities brokerage firms as Adviser
may select; (c) to sign and enter into on behalf of Client all documentation
necessary for the management of the Account as contemplated in this Agreement,
for which purpose Client appoints Agent attorney-in-fact; and (d) to act on
behalf of Client in all matters necessary or incidental to management of the
Account. This discretionary authority shall remain in full force and effect
until terminated pursuant to paragraph 14 hereof.
2. Services of Adviser.
By executing this Agreement, Adviser accepts the appointment as
investment adviser and agrees to supervise and direct the investments of and
for the Account in accordance with Paragraph 1 and the Strategy. The
responsibilities of Adviser do not extend to any assets of the Account other
than those listed on Exhibit A attached hereto and any options purchased or
sold pursuant to clause (a) of paragraph 1 hereof. Adviser does not give
legal, tax or estate planning advice.
Except as may be otherwise required by law, the Adviser will not be
required to take any action or render any advice with respect to the voting of
proxies solicited by or with respect to the issuers of securities in which the
assets of the Account may be invested.
3. Representations of Adviser.
Adviser represents and warrants that it is and will at all times during
the term of this Agreement continue to be duly registered with the Securities
and Exchange Commission as an investment adviser under the Investment Advisers
Act of 1940, as amended (the "Advisers Act") and is not an affiliate of,
controlled by or under common control with the issuer of the assets held in
the Account.
4. Representations and Indemnification by Client.
Client represents and warrants that it is authorized by law and by the
terms of the governing document to act as Trustee of the 2006 C.V. Starr
Volaris Trust, and that as such has the authority to delegate to Adviser the
investment management of the Account as provided in this Agreement, and such
delegation has been accomplished in accordance with procedures and permitted
by the governing document and by law.
The execution and delivery of this Agreement by Client shall constitute
the representation that the terms hereof do not violate any obligation by
which Client is bound, whether arising by contract, operation of law or
otherwise, and that (a) this Agreement will be binding upon Client in
accordance with its terms; (b) the person executing this Agreement on behalf
of the Client is fully authorized to enter into this Agreement; (c) the Client
will deliver to the Adviser such evidence of such person's authority to
execute this Agreement on behalf of the Client as the Adviser may reasonably
require; (d) the Client received a copy of Part II of the Adviser's Form ADV
more than 48 hours prior to execution of this Agreement; (e) the Client has
received a copy of and has read the document entitled Characteristics and
Risks of Standardized Options (document required to be sent to all clients
prior to effecting option transactions), and understands that the Adviser
shall provide a current copy of such document to the Client on request; and
(f) the Client has read, executed and understands the Risk Disclosure
Statement Concerning Derivatives attached as Exhibit C.
Client represents and warrants that all information it provides to
Adviser pursuant to Paragraph 6(d) hereof will be accurate and complete in all
material respects. Client agrees to indemnify and hold harmless Adviser, its
affiliates and its assignees (each such person, an "Indemnified Party") from
and against any and all losses, claims, damages and liabilities, joint or
several, to which such Indemnified Party may become subject, and relating to
or arising out of any breach of such representation and warranty, and will
reimburse any Indemnified Party for all expenses (including reasonable counsel
fees and expenses) as they are incurred in connection with the investigation
of, preparation for or defense or settlement of any pending or threatened
claim or any action, suit or proceeding arising therefrom, whether or not such
claim, action, suit or proceeding is initiated or brought by or on behalf of
Client.
5. Transaction Procedures; Brokerage.
Adviser may, but is not obligated to, aggregate purchase or sale orders
with those of other client accounts when executing transactions on behalf of
Client.
Unless otherwise directed, in exercising the authority granted to it to
place orders for the purchase or sale of securities and/or other financial
instruments, Adviser is authorized to execute transactions itself and/or
establish and maintain brokerage accounts, select any broker or dealer
(including any broker-dealer affiliated with Adviser) and negotiate
commissions and fees to be paid on such transactions, subject to a continuing
obligation to seek to obtain the best price, execution and overall terms. In
instances where the Adviser (as a registered broker-dealer) executes
transactions, the Client will pay brokerage commissions at the posted rates of
Adviser unless otherwise agreed in writing prior to the execution of this
Agreement.
6. Execution of Transactions by Adviser.
a. Principal Transactions
Before the completion of any transaction in which the Adviser proposes to
act as principal, the Adviser will disclose to the Client the Adviser's
capacity as principal and will obtain the Client's consent to such principal
transaction.
b. Authorization of Agency Cross Transactions
Pursuant to Section 206(3) of the Investment Advisers Act of 1940 and
Rule 206(3)-2 promulgated thereunder, the Client authorizes the Adviser to
effect agency cross transactions for the Account and understands that with
respect to agency cross transactions the Adviser will act as broker for, and
receive commissions from, and have a potentially conflicting division of
loyalties and responsibilities regarding both parties to such transactions.
The Client may revoke this authorization at any time upon written notice to
the Adviser.
c. Authorization to Effect Transactions
If the Account is subject to Section 11(a) of the 1934 Act and Rule
11a2-2(T) thereunder (or any similar rule which may be adopted in the future),
it is agreed that, unless otherwise instructed by Client in writing, Adviser
may retain commissions in connection with effecting any securities
transactions for the Account. To the extent applicable, Adviser will furnish
Client with all reports required by law.
d. Rule 144 of the Securities Act of 1933 ("Rule 144")
With respect to transactions, including but not limited to any sales,
covered call writing programs, derivative strategies, or other transactions
contemplated herein, Adviser shall transact in such securities in compliance
with Rule 144. Client shall promptly give notice to Adviser of any information
it may have concerning any intended dispositions or deemed dispositions of any
securities which may be aggregated with or attributable to Client for Rule 144
purposes prior to such disposition or deemed disposition, which may include,
but not be limited to gifts, sales, hedging activities, or other transfers. In
addition, Adviser shall promptly give notice to Client of any actions taken by
the Adviser that may be aggregated with or attributable to Client for Rule 144
purposes prior to such disposition or deemed disposition, which may include,
but not be limited to gifts, sales, hedging activities, or other transfers.
Adviser shall make all necessary Rule 144 filings on behalf of Client
that are required by the Adviser's activities pursuant to this Agreement in
such manner as is required by Rule 144. Client shall promptly supply Adviser
with all information necessary for Adviser to complete such filings relating
to the Adviser's activities in a timely fashion. Client shall keep complete
and accurate records of the number of shares with respect to which Rule 144
filings have been made and which Adviser has reported to the Client have been
sold. Client shall notify Adviser when Client believes that additional Rule
144 filings are required, so that Client and Adviser can coordinate on the
filing by Client of Rule 144 filings and the transactions by Adviser
contemplated herein. Notwithstanding anything to the contrary contained in
this Agreement, if Adviser in its sole discretion reasonably believes that it
has insufficient information necessary for Adviser to comply with Rule 144 and
its filing obligations hereunder, Adviser shall have full power and authority
to not engage in any transaction for which such filing may be necessary and to
take any other action or actions with respect to the Account assets that it
reasonably determines to be appropriate under the circumstances until it
receives the requisite information.
7. Authorization to Aggregate Orders and to Average Pricing.
The Client hereby authorizes the Adviser to aggregate purchases and sales
of securities for the Account with purchases and sales of securities of the
same issuer for other clients of the Adviser occurring on the same day. When
transactions are so aggregated, the actual prices applicable to the aggregated
transaction will be averaged, and the Account will be deemed to have purchased
or sold its proportionate share of the securities involved at the average
price so obtained. Average pricing will be used in both agency and principal
trades in reported securities (those that are listed on an exchange or
designated as national market securities.)
8. Limit of Liability.
Client represents that (a) it recognizes the inherent market fluctuation
risks which surround the investment and reinvestment of assets; (b) it is
aware of the possible losses on the transactions in which Adviser will engage
for the Account, and it is financially capable of bearing such losses; and (c)
it has not received any written or verbal guarantees of performance of the
Account and understands that no representative or agent of Adviser is
authorized to make any such guarantees or representations now or in the
future.
To the extent permitted by law, Adviser shall not be liable for any error
of judgment or for any loss suffered by the Client in connection with the
subject matter of this Agreement, except loss resulting from willful
misconduct, bad faith or gross negligence in the performance by Adviser of its
duties, or by reason of Adviser's reckless disregard of its obligations and
duties under this Agreement. Under certain circumstances, these laws may
impose liabilities on persons who act in good faith. Client expressly
understands and agrees that Adviser does not guarantee that a specific result
will be achieved through Adviser's management of the account.
Adviser shall not be responsible for any loss incurred by reason of any
act or omission of Client or any third party, other than any third party
controlled by, or under common control with, Adviser. Adviser shall be fully
protected in acting upon any instruction believed by it to be genuine and
signed or communicated by or on behalf of Client, and Adviser shall be under
no duty to make any investigation or inquiry regarding any Client instruction.
Adviser does not assume responsibility for the accuracy of information
furnished by any third party on which it reasonably relies.
9. Fees.
As compensation for the services provided by the Adviser under this
Agreement, the Client will pay the Adviser a fee in accordance with the fee
schedule described in Exhibit D to this Agreement which may only be amended in
writing by the parties. This fee for the Adviser's services with respect to
the Account shall be paid by debiting the Account quarterly in arrears at the
end of each calendar quarter in accordance with the attached fee schedule. The
initial fee will be assessed pro rata in the event this Agreement becomes
effective other than as of the first of the calendar quarter based on the
number of days during the quarter the assets were held in the Account.
To the extent that there is insufficient cash or cash equivalents in the
Account to cover the fee payable to Adviser in accordance with the fee
schedule described in Exhibit D of this Agreement, Adviser will send an
advisory fee calculation report to the Client. Client acknowledges that
Adviser charges interest on the debit balance in the Account until such
balance is satisfied. Fees paid in advance of a termination pursuant to
paragraph 12 of this Agreement will be prorated to the date of termination,
and any unearned portion thereof will be refunded to the Client.
10. Reporting/Valuation.
Adviser will provide Client with a monthly statement for any month during
which there is trading activity in the Account and Adviser will also provide
annual reports reflecting realized and unrealized gains and losses in the
Account.
Adviser will provide Client with a valuation report of the Account as of
the last day of each calendar quarter. The Account shall be valued in such
manner as shall be determined in good faith by Adviser to reflect fair market
value and the reports will reflect any information that Client shall request
in order to satisfy its oversight responsibility as Trustee. It is agreed that
Adviser, in the maintenance of its records, does not assume responsibility for
the accuracy of information furnished by the Client and its agents. Client
understands that this report shall not be used for tax reporting purposes.
Adviser will use its reasonable best efforts to obtain access to custody
information for the Accounts through an online interface.
11. Notice.
Any notice, instructions or other communications required or contemplated
by this Agreement shall be in writing and shall be addressed to the recipient
at the address first above written, except that either party may by notice
designate a different address for such party.
12. Termination.
This Agreement may be terminated by either party at any time upon 30
days' written notice to the other party, which notice shall be effective when
received by the other party. The termination of this Agreement shall not
affect any obligation or liability of the Client for any transaction entered
into or obligation incurred by the Client or on the Client's behalf prior to
such termination.
13. Assignment; Delegation.
This Agreement shall be binding upon the parties hereto and their
respective successors, heir and assigns; provided, however, that no
"assignment" of this Agreement (as such term is defined by the Investment
Advisers Act of 1940 and the rules thereunder) shall be made by Adviser or
Client without the consent of the other party. Client understands that, as a
result of this provision, a transaction involving Adviser that does not result
in a change in the actual management or actual control of Adviser will not
constitute an assignment and thus, no Client consent need be obtained in the
event of such a transaction.
14. Confidentiality.
Pursuant to Regulation S-P adopted by the Securities and Exchange
Commission, all nonpublic personal information provided by the Client to
Adviser shall be held confidential by the Adviser; unless (i) the Adviser is
authorized in writing by the Client to disclose such information to
individuals and/or entities not affiliated with the Adviser; (ii) required to
do so by judicial or regulatory process; (iii) it is necessary to carry out
the purpose of this Agreement; or (iv) otherwise permitted to do so in
accordance with the parameters of Regulation S-P. All recommendations, advice
or other work product of the Adviser developed under the terms of this
Agreement and disclosed to the Client shall be treated as confidential, except
as required by law to be disclosed.
15. Construction; Governing Law.
Headings used in this Agreement are for convenience only, and shall not
affect the construction or interpretation of any of its provisions.
This Agreement shall be interpreted and construed in accordance with the
internal substantive laws (and not the choice of law rules) of the State of
New York. All actions and proceedings brought by either Party relating to or
arising from, directly or indirectly, this Agreement shall only be litigated
in courts located within the State of New York. The Parties hereby submit to
the personal jurisdiction of such courts; hereby waive personal service of
process upon it and consent that any such service of process may be made by
certified or registered mail, return receipt requested, directed to it at its
address last specified for Notices hereunder, and service so made shall be
deemed completed five (5) days after the same shall have been so mailed; and
hereby waive the right to a trial by jury in any action or proceeding with the
other Party.
16. Non-Waiver of Rights.
Nothing herein shall in any way constitute a waiver or limitation of any
rights that Client may have under applicable federal or state laws.
17. Entire Agreement; Amendment.
This Agreement is the entire agreement between the parties as to the
subject matter covered herein and supersedes all prior agreements and
understandings of the parties in connection therewith. If there is any
inconsistency or conflict between this Agreement and any other agreement
between Adviser and Client relating to the Account, the terms and provisions
of this Agreement shall control. If any provision of this Agreement shall be
held or made invalid by statute, rule, regulation, decision of a tribunal or
otherwise, the remainder of this Agreement shall not be affected and, to this
extent, the provisions of this Agreement shall be deemed to be severable. This
Agreement may not be modified or amended except in a writing signed by the
parties.
18. Disclosures.
a. The Adviser shall not be liable hereunder for any failure to
recommend the purchase or sale of any security on behalf of the Client when,
in the Adviser's opinion, such transaction (i) may be contrary to policies and
procedures applicable to the Adviser, including those policies and procedures
designed to avoid the misuse or appearance of misuse of nonpublic information;
or (ii) may constitute a violation of any federal or state law, rule or
regulation or a breach of any fiduciary or confidential relationship between
Adviser or any of Adviser's officers or employees and any other person or
persons.
b. The Client understands that the Adviser's investment banking
division is the regular investment banker for a number of major corporations
and, from time to time, performs investment banking services for other
companies as well. The Adviser believes that the nature and range of clients
to whom it renders such investment banking services is such that it would be
inadvisable to exclude these companies from the Account's portfolio.
Accordingly, unless the Client instructs the Adviser to the contrary, it is
likely that the Client's holdings will include the securities of corporations
for whom the Adviser performs investment banking services. Moreover, the
Client's portfolio may include the securities of companies in which the
Adviser or its officers or employees have positions, long or short.
c. The Client understands that the Adviser's opinions,
recommendations and actions will be based on information deemed by the Adviser
to be reliable, but not guaranteed to or by the Adviser. The Client agrees
that the Adviser shall not in any way be liable for any error in judgment or
any act or omission, provided that the Adviser acts in good faith, except as
may be otherwise provided in applicable federal and state securities laws.
d. The Client understands that the Adviser in performance of its
obligations and duties under this Agreement is entitled to rely upon the
accuracy of information furnished by Client or on the Client's behalf, without
further investigation.
e. The Client agrees that the Adviser will not be liable for any
losses, costs or claims resulting from the Client's failure to notify the
Adviser pursuant to paragraph 1 of this Agreement of any modifications or
amendments to the Investment Guidelines or the Trust.
f. The Client understands that the Adviser and/or its directors,
officers and employees handles accounts for, and renders investment advice and
other investment management and broker-dealer services to other investors and
institutions with respect to, and it may for its own account hold, purchase,
sell or otherwise trade in and deal with securities which are the same as or
similar to those which the Adviser purchases, sells, or otherwise trades in
for the Investment Account, and that the same security will not always be
bought or sold at the same price for each account. The Adviser shall be in all
respects free to take action with respect to investments in securities for the
Investment Account which is the same as or different from the action taken by
it and/or any of the above-mentioned persons in handling such other accounts
or rendering such other investment management or broker-dealer services or
with respect to its or their investments in Securities. To the extent
practicable, it is the Adviser's policy to allocate investment opportunities
to the Investment Account over a period of time on a fair and equitable basis
relative to other investors and institutions.
19. Counterparts.
This Agreement may be executed in one or more counterparts each of which
when executed and delivered shall be an original and both counterparts
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the first date written above.
THE CLIENT ACKNOWLEDGES RECEIVING A COPY OF THIS AGREEMENT.
PITCAIRN TRUST COMPANY, Trustee of the 2006 C.V. Starr Volaris Trust
By:
------------------------------------------------
Name:
Title:
CREDIT SUISSE SECURITIES (USA) LLC
----------------------------------------------------
Branch Manager
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Managing Director
Exhibit I
THE 2006 MRG/CPG VOLARIS TRUST
THIS TRUST AGREEMENT (this "Agreement") is entered into on the 9th day
of March, 2006, by and between Maurice R. Greenberg and Corinne P. Greenberg
(each the "Settlor" of his or her one-half of the trust assets and, where
appropriate in the context, the "Settlors"), and Pitcairn Trust Company, a
Pennsylvania corporation (the "Trustee").
W I T N E S S E T H:
-------------------
FIRST: Name of Trust
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This Trust shall be known as the 2006 MRG/CPG Volaris Trust (the
"Trust").
SECOND: Trust Property
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The Settlors hereby transfer, deliver and convey to the Trustee all of
the Settlors' right, title and interest in and to the property set forth in
Schedule A, and the Trustee acknowledges receipt of such property, IN TRUST,
and agrees to hold, administer and distribute such property, as well as any
other property that may later become subject to this Trust under the terms and
conditions set forth below. The Settlors own the shares being transferred in
equal share, as tenants in common. The Trustee shall administer the assets
transferred hereby as a single trust, for the benefit of each of the Settlors
as to one-half thereof.
The trust property to which the provisions hereof shall apply shall
include not only the property set forth in Schedule A but also any other
property acceptable to the Trustee which the Settlors or either of them may
hereafter add during the Trust term and that may later become subject to this
Trust, for the purposes and on the terms and conditions set forth herein.
THIRD: Trust Purpose
----- -------------
Notwithstanding any other provision herein, the Settlors intend to
avoid any conflict of interest or appearance thereof that may arise from the
Settlors' powers as shareholders up to the date of this Agreement of American
International Group, Inc. (the "Issuer"), or from the duties and powers of
Maurice R. Greenberg, one of the Settlors, as the former chief executive
officer of the Issuer. In furtherance thereof, the Settlors hereby create this
Trust, the primary purpose of which is to entrust to the Trustee the authority
(within the terms herein, including, without limitation, the remaining
provisions of this Article THIRD) to make all decisions and effectuate all
decisions as to when and to what extent any transactions are effected with
regard to any assets transferred to the Trust, including any Issuer stock
transferred hereto (the "Shares"), in all instances without any participation
in or knowledge of such decisions by either of the Settlors, any dependent
child of either Settlor or any officer, director, shareholder or other person
whose relationship to either Settlor or the Issuer gives such person access,
directly or indirectly, to material information about the Issuer that is not
generally available to the public (an "Interested Party"), subject to the
provisions hereof. Although the Trustee shall have full discretion, the
Settlors direct that the Trustee enter into a contract with Credit Suisse
Securities (USA) LLC substantially in the form of Schedule B, attached hereto,
under which the Trustee will retain Credit Suisse Securities (USA) LLC to
extract returns from the trust's assets identified in such contract based on
stock market volatility, utilizing (i) a low risk tolerance strategy (as
defined in Exhibit B of such contract) when Issuer common stock has a market
price below ninety dollars ($90) per share and (ii) a medium risk tolerance
strategy (as defined in Exhibit B of such contract) when Issuer common stock
has a market price equal to or greater than ($90) per share. Should such
contract terminate for any reason, the Settlors direct the Trustee to enter
into a substantially similar contract with another investment manager (each
investment manager under this agreement, including Credit Suisse Securities
(USA) LLC, hereinafter referred to as the "Adviser" and each investment manager
contract hereinafter referred to as the "Adviser Contract"). Furthermore, the
Settlors relieve the Trustee of all responsibility for managing the underlying
assets and hereby limit the Trustee's responsibility to oversight of the
Adviser. The Settlors authorize the Trustee to rely solely on statements
provided by the Adviser to fulfill its oversight responsibilities as Trustee.
The Settlors acknowledge and agree that each Settlor and/or his or her legal
and financial representatives and advisers, has received, reviewed and
understands (i) the disclosures, including, without limitation, the risk
disclosures relating to the Strategy (as defined in the Adviser Contract); (ii)
a copy of Part II of the Adviser's Form ADV; (iii) a copy of the document
entitled Characteristics and Risks of Standardized Options, and understands
that the Adviser shall provide a current copy of such document on request; and
(iv) the Risk Disclosure Statement Concerning Derivatives attached as Exhibit C
to the Adviser Contract.
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FOURTH: Trust Administration
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(a) The Trustee shall collect the income from the trust property and
shall hold any cash, whether income or principal, received by the Trust in cash
or cash equivalents. The Trustee shall pay to each Settlor the amount of any
cash and cash equivalents on hand in his or her share of the trust to the
extent that the value of such cash and cash equivalents shall be greater than
five percent (5%) of the fair market value of the Shares, measured at the end
of each calendar quarter using for valuation purposes the last sale price as
reported on the last trading day on or prior to the end of such quarter, such
payment to be made within thirty (30) days thereof, provided, however, that the
Trustee may, in its absolute discretion, withhold the payment of any such cash
or cash equivalents as a reserve for any cash requirements of the trust,
including any fees, expenses or other liabilities. The Trustee may pay from
time to time so much of the balance of the net income and principal, including
to the extent of all thereof, to or for the benefit of a Settlor; provided,
however, that the Trustee shall not distribute (other than pursuant to Article
FIFTH herein) any Shares to a Settlor unless otherwise permitted under this
Agreement.
(b) Notwithstanding anything to the contrary in this Agreement, the
Trustee shall distribute all net income of the trust during the life of each
Settlor to, and only to, such Settlor or to such Settlor's order (or, if
deceased, to such Settlor's estate), which income shall be so distributed no
later than as soon as practicable after the end of each calendar year, if and
to the extent that the Settlors so directs, and all amounts distributable under
this Agreement during each Settlor's life shall be distributed only to such
Settlor or to his or her order (or if incapacitated, to the Settlor's duly
appointed guardian or fiduciary).
(c) For purposes of this Article FOURTH, "income" shall include income
from all sources, regardless of whether characterized for other purposes as
principal or income including, without limitation, income generated with
respect to call options and/or other derivative securities.
FIFTH: Trust Termination
----- -----------------
Upon the earliest to occur of (a) a Settlor's death, (b) the
occurrence of an event described in Article EIGHTEENTH, or (c) written notice
to the Trustee from a Settlor or a
3
Settlor's duly appointed guardian or fiduciary, or an agent under a power of
attorney revoking or ordering the termination of his or her portion of this
Trust (in any case, the "Termination Date"), the Trustee shall distribute the
principal (and income, to the extent not previously distributed) allocable to
such Settlor, as then constituted to anyone previously designated by such
Settlor in writing, including the Settlors, the Settlors' estates or creditors
of the Settlors' estates, or, in default of the exercise of such general power
of appointment, to the Settlors in his or her proportionate share if both then
living; or if either Settlor is incapacitated, to such Settlor's duly appointed
guardian or fiduciary, or an agent under a power of attorney executed by such
Settlor; or if deceased, to the duly qualified legal representative of such
Settlor's estate, including the executors and/or administrators of such
Settlor's estate.
SIXTH: Amendments
----- ----------
This Trust can be amended at any time or from time to time by the
Trustee, but only if the Trustee is advised by the Trustee's or the Settlors'
securities counsel in writing that such amendment is necessary or desirable,
and then only to the extent so necessary or desirable (a) to assure that the
Trust and the sale of the Shares, writing, settling and rolling of call options
with regard to the Shares, or any other derivative strategy effectuated by the
Trustee or its investment adviser relating to the Shares are consistent with
(i) then applicable securities laws, regulations or administrative policies or
interpretations, and (ii) any responsibility that the Trustee, Adviser or the
Settlor may have thereunder or (b) to avoid unanticipated liability of the
Settlors, Trust, Trustee or Adviser thereunder. If the Trustee intends to amend
the Trust pursuant to this Article SIXTH, it shall notify the Settlors in
writing at least three business days before the effective date of such
amendment.
SEVENTH: General Powers of the Trustee
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In addition to any powers granted specifically or generally to the
Trustee as provided by law, and in addition to every power and discretion
conferred upon the Trustee by any provision hereof, the Settlors confer upon
the Trustee the express powers set forth in this Article to be exercised by the
Trustee in its sole discretion with respect to all property at any time coming
into its hands, whether principal or income and whether by purchase or
otherwise but at all times in accordance with Article THIRD:
4
(a) To take any actions with respect to transactions in the Shares for
so long as the Shares are held as an asset of the Trust; and hold the Shares in
the Trust, sell all or some of the Shares from time to time, write and roll
equity, index and over-the-counter covered calls and use call options and/or
other derivative strategies to generate income, manage risk, and facilitate
exit strategies for the account of the respective Settlor, provided that such
action is not in violation of any applicable laws;
(b) To own, hold and possess such other securities and interests in
the Issuer or other entities, either publicly or closely held, as part of or as
all of the Trust assets for the entire Trust term, and continue to invest the
principal of the Trust as then constituted in any such securities or interests
as the Trustee in its discretion deems appropriate. The Trustee shall not be
liable for any loss resulting from the retention of the Shares, or such
securities or interests as part of or as all of the assets of the Trust. The
Trustee shall have the power to retain the Shares and such securities or
interests, notwithstanding any applicable law relating to the investment of
trust assets, including any laws requiring diversification of trust assets;
(c) With respect to any stock or other securities forming part of this
Trust, to exercise all voting rights, either in person or by proxy; exercise
conversion, subscription, option and similar rights; enter or refuse to enter
any dissolution, liquidation, consolidation, recapitalization, reorganization,
merger or other change in capital structure, and in connection therewith, make
exchanges of stock or other securities and enter into agreements on such terms
and conditions as the Trustee may deem advisable; including without limitation,
the deposit of any property with any protective, reorganization or similar
committee, the delegation of discretionary powers thereto, the sharing in the
payment of its expenses and compensation and the payment of any assessments
levied with respect to such property; receive and retain property under any
such plan whether or not the same is of a class in which fiduciaries are
authorized by law to invest trust funds, and enter into voting trusts and
agreements with other stockholders, and other holders of securities, or any one
or more so such person, for such purposes and for such period of time (whether
or not the same extends beyond the actual or probable duration of any trust
created hereunder), and upon such terms and conditions as the Trustee shall
deem advisable, provided, however, that notwithstanding the foregoing or any
other provision of this Trust, the Trustee shall have full and absolute
discretion with respect to the exercise of all voting rights, such discretion
to include, without limitation, the authority to vote in accordance with any
recommendation, to Issuer securityholders generally, of any independent third
party, including Institutional Shareholder Services, Inc;
(d) To invest in mortgage participations, shares of investment trusts
and regulated investment companies, including those controlled by any
investment advisor or investment counsel employed by the Trustee, mutual funds,
money market funds and index funds that may be acquired by prudent investors;
(e) To hold securities, including stock of the Issuer, or other
property in the Trustee's name as the Trustee under the Trust, in the Trustee's
own name or in the name of a nominee; or the Trustee may hold securities
unregistered in such condition that ownership will pass by delivery;
(f) To make executory contracts and grant options for any period and
for any purpose;
(g) To buy and trade in securities and other financial instruments of
any nature; buy and sell (covered or uncovered) equity, index and over-the
counter options and otherwise deal in puts and calls; and to maintain and
operate margin accounts and other accounts with brokers as security for loans
and advances made to the Trustee; in particular, the Trustee is specifically
authorized to sell securities to cover any of the Trust's expenses;
(h) To prosecute, defend, contest or otherwise litigate, at the
expense of the Trust, legal actions or other proceedings for the protection or
benefit of the Trustee or Trust. The Trustee shall further have the power to
pay, compromise, release, adjust or submit to arbitration any debt, claim or
controversy against or in favor of the Trust, as long as the Trustee reasonably
believes that such action will be beneficial to the Trust;
(i) To carry, at the expense of the Trust, insurance of such types and
in such amounts as the Trustee may deem advisable to insure the trust assets
against any loss or damage and protect the Trustee against third party
liability;
(j) To employ and pay the fees of, at the expense of the Trust,
through the sale of trust assets if necessary, agents, experts, accountants,
counsel, investment advisors, custodians, brokers, and others (including the
Trustee, its successor or any affiliate) and delegate discretionary powers
(including investment functions) to, and rely upon information and advice
furnished by such agents, experts, accountants, counsel, investment advisors,
custodians, brokers and others in connection with issues specific to the Trust,
the Settlors or the trust estate in connection with the Trustee's management,
administration and protection of the trust estate; and
(k) To release or to restrict the scope of any power that the Trustee
may hold in connection with the Trust hereunder, whether such power is
expressly granted in this instrument or implied by law. The Trustee shall
exercise this power in a written instrument executed by the Trustee and
delivered to the Settlors, specifying the power(s) to be released or restricted
and the nature of the restriction.
EIGHTH: Successor Trustees
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(a) If the Trustee shall for any reason cease to act as the Trustee of
the Trust, the Trustee shall promptly notify the Settlors of such occurrence
and such person(s) as the Settlors shall appoint in writing shall act as the
Trustee(s); provided, however, any successor Trustee appointed as hereinabove
provided may not be either of the Settlors or any other Interested Party. All
appointments of successor Trustee(s) shall be exercised in writing, duly
acknowledged and shall be effective upon the written acceptance of the
successor Trustee delivered to the Settlors.
(b) Any successor Trustee shall succeed as the Trustee of the Trust
with like effect as though originally named the Trustee under this instrument.
All authority, powers and discretions conferred on the original Trustee under
this instrument shall pass to any successor Trustee.
(c) No bond or other security shall be required of any Trustee named
herein, or appointed as hereinabove provided, for the faithful performance of
such Trustee's duties in any state or other jurisdiction.
NINTH: Trustee Compensation
----- --------------------
The Trustee shall be entitled to receive compensation for its services
for acting in any fiduciary capacity under this instrument in accordance with
Schedule C attached hereto and incorporated by reference herein.
TENTH: Trustee Resignation
----- -------------------
The Trustee may resign as the Trustee hereunder at any time without
leave of the Court by giving written notice to the Settlors. The resignation
shall become effective on the acceptance of the Trusteeship by the successor
Trustee(s) designated pursuant to Article EIGHTH hereof. Upon the written
acceptance(s) by the appointed successor Trustee(s), and duly acknowledged
receipt and release of the Settlors, the resigning Trustee shall (i) promptly
deliver all trust assets in its possession to the successor Trustee(s), (ii)
execute all documents and (iii) do all such things as may be necessary
therefor.
ELEVENTH: Trustee Removal
-------- ---------------
The Settlors, acting jointly, may remove any acting Trustee, with or
without cause, by giving written notice to the Trustee, and one or more
successors thereto shall be appointed in accordance with Article EIGHTH hereof.
Upon the written acceptance(s) by the appointed successor Trustee(s), and duly
acknowledged receipt and release of the Settlors, the removed Trustee shall (i)
promptly deliver all trust assets in its possession to the successor
Trustee(s), (ii) execute all documents and (iii) do all such things as may be
necessary therefor.
TWELFTH: Trustee Liability
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(a) A successor Trustee shall not be responsible for the acts or
omissions of any prior Trustee.
(b) The original Trustee shall not be liable to the Settlors, or the
estate of either of the Settlors, or their heirs, executors, administrators and
assigns, for any act, omission or default of the Trustee, including but not
limited to exercising voting rights as provided under clause (c) of Article
SEVENTH hereof , in its complete discretion, or of any other person, except by
reason of the Trustee's acting in bad faith, willful misconduct or gross
negligence.
(c) The Trust, the Settlors or the Settlors' estates shall indemnify
the Trustee to the fullest extent permitted by law, and shall save and hold the
Trustee harmless from and in respect of all fees, costs and expenses incurred,
including attorneys' fees, in connection with or resulting from any claim,
action or demand against (or threatened against) the Trust or the Trustee,
which arise out of or in any way relate to the Trust or the trust estate, or
the performance of the Trustee's duties under this instrument, including but
not limited to following the income extraction program as described under
Article THIRD hereof, and all such claims, actions and demands and any losses
or damages resulting therefrom, including amounts paid in settlement or
compromise of any such claim, action or demand; provided, however, this
indemnity shall not extend to conduct by the Trustee that is adjudged to
constitute bad faith, willful misconduct or gross negligence.
(d) Except to the extent any liability, loss or depreciation results
from the Trustee's bad faith, willful misconduct or gross negligence, (i) the
Settlors, their heirs, executors, administrators, and assigns shall indemnify
and hold the Trustee harmless from any and all liability resulting from the
exercise or non-exercise of its discretion to engage in or disengage from any
program designed to diversify or increase the return on the Issuer's common
stock, (ii) the Trustee shall not be responsible for any loss or depreciation
in value of any property authorized to be retained or acquired and (iii) the
judgment of the Trustee with respect to the exercise of its discretion shall be
binding and conclusive upon all persons who are beneficiaries or otherwise
interested parties to this Trust.
(e) Unless resulting from the Trustee's bad faith, willful misconduct
or gross negligence, and upon satisfaction of the conditions set forth herein
with respect to each such action, every election, determination or other
exercise of discretion by the Trustee with respect to the retention,
disposition or acquisition of any trust assets shall be deemed to have been
made with reasonable care, prudence and diligence by the Trustee.
THIRTEENTH: Adviser Liability
---------- -----------------
(a) The Adviser shall not be liable to the Settlors, the Trustee or
the Settlors' estates, heirs, executors, administrators and assigns, for any
act, omission or default of the Adviser or of any other person, except by
reason of the Adviser's acting in bad faith, willful misconduct or gross
negligence.
(b) The Trust, the Settlors or the Settlors' estates shall indemnify
the Adviser to the fullest extent permitted by law, and shall save and hold the
Adviser harmless from and in respect of all fees, costs and expenses incurred,
including reasonable attorneys' fees, in connection with or resulting from any
claim, action or demand against (or threatened against) the Trust or the
Adviser, which arise out of or in any way relate to the Trust or the trust
estate, or the performance of the Adviser's duties hereunder or under the
Adviser Contract, including but not limited to following the investment program
referred to in Article THIRD hereof, and all such claims, actions and demands
and any losses or damages resulting therefrom, including amounts paid in
settlement or compromise of any such claim, action or demand; provided,
however, (1) this indemnity shall not extend to conduct by the Adviser that is
adjudged by a court of appropriate jurisdiction to constitute bad faith,
willful misconduct or gross negligence by the Adviser, (2) the Adviser shall
provide written notice to the Trustee and Settlors of any such claim, action or
demand relating to such indemnification, and (3) the settlement or compromise
of any such claim, action or demand shall be approved in writing by the
Settlors, which consent shall not be unreasonably withheld.
(c) Except to the extent any liability, loss, depreciation or the
Adviser's judgment results from the Adviser's bad faith, willful misconduct or
gross negligence, (i) the Settlors, their heirs, executors, administrators, and
assigns shall indemnify and hold the Adviser harmless from any and all
liability resulting from the exercise or non-exercise of its discretion to
engage in or disengage from any program designed to diversify or increase the
return on the Issuer's common stock, (ii) the Adviser shall not be responsible
for any loss or depreciation in value of any property authorized to be retained
or acquired and (iii) the judgment of the Adviser with respect to the exercise
of its discretion shall be binding and conclusive upon all persons who are
beneficiaries or otherwise interested parties to this Trust.
(d) Unless resulting from the Adviser's bad faith, willful misconduct
or gross negligence, and upon satisfaction of the conditions set forth herein
with respect to each such action, every election, determination or other
exercise of discretion by the Adviser with respect to the retention,
disposition or acquisition of any trust assets shall be deemed to have been
made with reasonable care, prudence and diligence by the Adviser.
FOURTEENTH: Statements of the Trustee
---------- -------------------------
A. The Trustee shall generate general account summary information each
calendar quarter and may provide to the Settlors more detailed statements of
account activity from time to time, subject to Article SIXTEENTH hereof.
Statements shall be provided no earlier than the earlier of (i) 90 days from
the date of the statement and (ii) the last expiration date of open positions
listed on such statement.
B. A successor Trustee may accept as correct any statements of trust
assets made by any predecessor Trustee; and no successor Trustee shall have any
duty to take action to obtain redress for breach of trust committed by any
predecessor Trustee, unless requested in writing by a person having a present
or future beneficial interest in the Trust. A successor Trustee, however, may
institute any action or proceeding for the settlement of the statements, acts
or omissions of any predecessor Trustee.
FIFTEENTH: Grantor Trust Status
--------- --------------------
The Settlors intend that the Trust shall be taxed as a "grantor trust"
pursuant to Section 676 of the Internal Revenue Code of 1986, as amended (the
"Code"), with each Settlor treated as the "owner" of one-half of the Trust
under Section 671 of the Code. The Trustee shall file any required income tax,
information and other returns for the Trust promptly after the close of each
taxable year of the Trust (or, if earlier, as required by applicable law) and
shall timely provide each Settlor with only such information as shall be
necessary to enable the Settlors to timely file his or her federal, state and
local income tax, information and other returns with respect to his or her
interest in the Trust or as otherwise required by applicable law. The Trustee
is hereby authorized to make an election under Regulation ss.
1.671-4(b)(2)(i)(A) to use the Settlors' tax identification numbers if such
election can be made under applicable law. If such an election is made, the
Trustee shall provide the Settlors with the information required by Regulation
ss. 1.671-4(b)(2)(ii). Upon Trustee's request the Settlors shall provide the
Trustee with completed IRS Forms W-9 (or any successor thereof). Any tax advice
or services required by the Trust, or the Trustee with respect to the Trust,
shall be provided, at the expense of the Trust, by a firm authorized by the
Settlors from time to time, and any filing with any tax authority on behalf of
the Trust, or the Trustee with respect to the Trust, shall require the prior
consent of the Settlors. The tax advisor initially authorized by the Settlors
shall be the firm of Kronish Lieb Weiner & Hellman LLP.
SIXTEENTH: Blind Trust between the Settlors and the Trustee
--------- ------------------------------------------------
A. Prohibition on Direct or Indirect Communications. Except as
otherwise specifically provided in this Agreement, the Settlors and the Trustee
shall not communicate, directly or indirectly, about the Shares or other
securities in the Issuer.
B. Limitation on Equity Ownership. In no event shall the
Settlors place in the Trust securities that, when aggregated with any
securities of the same issuer already held in the Trust, would represent
beneficial ownership equal to or greater than 10% of the outstanding equity
securities of a corporation or other entity (including the Issuer) if such
class of securities is registered under Section 12 of the Exchange Act.
C. Compliance with Rule 144. With respect to transactions, including
but not limited to, any sales, covered call writing programs, derivative
strategies, or other dispositions by the Trustee with regard to the Shares, the
Trustee shall transact in such securities in compliance with Rule 144 of the
Securities Act of 1933, as amended ("Rule 144") and make, or cause a third
party, including any Adviser, to make, such filings as required. The Settlors
shall promptly give notice to the Trustee of any intended disposition or
activity that may be deemed a disposition of any of the Issuer's securities
held by the Settlors or any other person or entity, including deemed
dispositions pursuant to benefit plans, whose transactions in the Issuer's
securities may be aggregated with or attributable to either Settlor, prior to
such disposition or deemed disposition, which may include, but not be limited
to gifts, sales, hedging activities, or other transfers. Such intended
disposition or deemed disposition shall only take place if approved in writing
by the Trustee if in the Trustee's sole discretion such disposition or deemed
disposition is not in conflict with the Trustee's actions required or allowed
under this Trust and Rule 144. Also, to facilitate any Rule 144 filings
required to be made by either Settlor upon such disposition or deemed
disposition, the Trustee shall supply the Settlors with the information
required to be completed on such filing relating to the Trust's activities. In
accepting any securities, the Trustee may rely on the Settlors' representation
that such transfer will comply with the limitations provided in this paragraph.
D. Compliance with Section 16 by the Settlors. The Settlors shall
comply with any and all reporting requirements under Section 16 of the Exchange
Act upon the transfer of any assets to the Trust or back to either Settlor,
including filing all Form 4's and Form 5's required by applicable Exchange Act
rules. To facilitate such compliance, the Trustee shall notify the Settlors and
the Settlors' designated representatives of all transactions effected by the
Trust that may be reportable under Section 16(a) of the Exchange Act not later
than one day after initiating each such transaction. In addition, the Settlors
will promptly provide to the Trustee a list of all transactions reportable
under Section 16(a) of the Exchange Act executed within seven (7) months
previous to the date hereof by either Settlor or anyone whose activities may be
attributed to either Settlor, including transactions that are exempt from
Section 16(b) of the Exchange Act.
E. Investment Control by the Settlors. The Settlors and the Trustee
acknowledge and agree that the Settlors do not have or share and will not
exercise authority or control over, nor will attempt to influence in any way
the Trustee's decisions that directly or indirectly affect the acquisition or
disposition of any options, derivative securities or other securities of the
Issuer or relating to the Issuer or the Issuer's securities by the Trust,
including decisions to continue to hold an investment ("Investment Decisions").
F. No Voting Control by the Settlors. The Settlors and the Trustee
acknowledge and agree that the Settlors do not have or share and will not
exercise authority or control over, nor will attempt to influence in any way,
the Trustee's decisions relating to the voting of the Shares (or any decision
to refrain from voting on a matter) or the giving of a proxy with respect
thereto ("Voting Decisions").
G. No Solicitation of Advice by the Trustee. The Trustee acknowledges
and agrees that it will not under any circumstances request from any Interested
Party, directly or indirectly, any information, regardless of its form, which
may be written, oral, electronic "soft copy" or any other form used to
communicate, concerning, without limitation, the results of operations,
financial condition, technology, research and development activities,
employees, officers, directors, business or prospects of the Issuer or any
other information that could materially influence an Investment Decision or a
Voting Decision ("Advice"). The foregoing notwithstanding, the Settlors and the
Trustee agree and understand that the Trustee, as part of keeping itself fully
informed regarding the Issuer in particular and regarding its industry segment
and the market in general, may participate in analyst calls and other public
communications from the Issuer irrespective of whether either Settlor or any
other Interested Party serves as the spokesperson for the Issuer during the
course of such public communications and further, that participating in such
analyst calls and other public communications and communications with or on
behalf of the Issuer will not be deemed a violation of the Trust, or the
Trustee's duties hereunder. The parties acknowledge and agree that the
restrictions on the "Trustee" in this clause G shall be deemed to apply solely
to the employees of the trust department of any corporate Trustee responsible
for administering this Trust and not to the Trustee in its corporate capacity
generally, in its capacity as a service provider outside of its trust
department, or in its capacity as a service provider to other accounts within
its trust department.
H. No Provision of Advice by the Settlors. The Settlors acknowledge
and agree that under no circumstances, whether directly or indirectly, will he
or she provide any Advice to the Trustee or to any other person associated with
Investment Decisions or Voting Decisions with respect to the Shares. The
Settlors and the Trustee further acknowledge and agree that, should either
Settlor be approached by any of the foregoing persons seeking to engage in a
dialogue (oral or written) concerning any subject that might have a possible
bearing on an Investment Decision or a Voting Decision, such Settlor will
inform the other person involved in the dialogue of the obligations of the
parties hereunder, and will refrain from providing any Advice during the course
of any such dialogue. Without limiting the foregoing, the Settlors specifically
agree that they will not provide to the Trustee or its agents or associates any
information regarding the Issuer that he has obtained through his position as a
director, officer or employee of the Issuer or an affiliate of any such
director, officer or employee.
I. Material non-public information. The Trustee represents that the
employees of the Trustee administering the Trust have no material non-public
information about the Issuer and shall not execute any transactions in the
Trust property while in possession of such information. The parties acknowledge
and agree that the restrictions on the "Trustee" in this clause shall be deemed
to apply solely to the employees of the trust department of any corporate
Trustee responsible for administering this Trust and not to the Trustee in its
corporate capacity generally, in its capacity as a service provider outside of
its trust department, or in its capacity as a service provider to other
accounts within its trust department. In addition, the parties agree that the
transactions by the Trustee in the Trust property contemplated hereunder are
independent of any other transactions that the Settlors may or may not take
with respect to securities of the Issuer or otherwise.
SEVENTEENTH: Situs of the Trust
----------- ------------------
This Agreement shall be construed in accordance with the custom and
usage prevailing in, and be regulated by the laws of the Commonwealth of
Pennsylvania. As long as the Trust is a Pennsylvania trust, the law governing
the administration of the Trust shall be controlled by Pennsylvania law. If
Trustee proposes to effect any change that would cause the Trust to cease to be
a Pennsylvania trust, it shall notify the Settlors at least ten days in advance
of effecting such change. This Article shall apply regardless of any change of
residence of Trustee, or any beneficiary, or the appointment or substitution of
a Trustee residing or doing business in another state.
EIGHTEENTH: Severability of Provisions
---------- --------------------------
If any provisions of this instrument are declared invalid or
unenforceable, the remaining provisions shall nevertheless be carried into
effect; provided, however, that the parties acknowledge that a principal
purpose of the transactions effectuated by the Trust is that the transactions
not be attributable to either Settlor for purposes of Section 16 of the
Exchange Act and, if any provision of this Agreement that is necessary or
advisable for such purpose is declared by a court of appropriate jurisdiction
to be invalid or unenforceable, then this Trust will terminate.
NINETEENTH: Loans
---------- -----
The Trustee has the power upon any terms, including on a recourse or
non-recourse basis, to borrow money from any person, including itself, its
successor or any affiliate or any Adviser, in an amount up to ten (10%) percent
of the trust assets, valued as of the date of such loan, to be secured by the
trust assets, for any lawful purpose and to pledge assets as security for
repayment. The Trustee, in its corporate capacity, is also authorized, in its
sole discretion, to lend to either Settlor up to the maximum amount permitted
by law, which loans to the Settlor shall be full recourse against such Settlor.
TWENTIETH: Execution in Counterparts
--------- -------------------------
This Agreement may be executed via facsimile, in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
TWENTY-FIRST: Sole Agreement
------------ --------------
All prior understandings, agreements, representations and warranties,
oral or written, between the Settlors and the Trustee are merged in this
instrument.
TWENTY-SECOND: Successors
------------- ----------
This instrument shall be binding upon and inure to the benefit of the
parties hereto, their successors, heirs, executors, and administrators.
IN WITNESS WHEREOF, the Settlors and the Trustee have duly executed
this agreement as of the 9th day of March, 2006.
SETTLORS:
/s/ Maurice R. Greenberg /s/ Shake Nahapetian
- ------------------------------- (SEAL) -----------------------------------
Maurice R. Greenberg WITNESS
/s/ Corinne P. Greenberg /s/ Mona Benedetto
- ------------------------------- (SEAL) -----------------------------------
Corinne P. Greenberg WITNESS
TRUSTEE:
PITCAIRN TRUST COMPANY
By: /s/ Averill R. Jarvis ATTEST: /s/ Denise L. Wallace
-------------------------- ---------------------------
Name: Averill R. Jarvis Ass't. Sec'y.
Title: Senior Vice President
ACKNOWLEDGMENT OF SETTLORS
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On March 9, 2006 before me, Lynne E. Harrison the undersigned,
personally appeared Maurice R. Greenberg and Corinne P. Greenberg personally
known to me or provide to me on the basis of satisfactory evidence to be those
individuals whose names are subscribed to the within instrument and acknowledged
to me that he/she executed the same in his/her capacity, and that by his/her
signature on the instrument, each such individual, or the person upon behalf of
which the individual acted executed the instrument.
(SEAL) /s/ Lynne E. Harrison
---------------------
Notary Public
ACKNOWLEDGMENT OF TRUSTEE
COMMONWEALTH OF PENNSYLVANIA )
) SS.:
COUNTY OF MONTGOMERY )
On March 10, 2006 before me, Christina L. Pastor the undersigned,
personally appeared Averill R. Jarvis personally known to me or provide to me
on the basis of satisfactory evidence to be the individual whose name is
subscribed to the within instrument and acknowledged to me that he/she executed
the same in his/her capacity, and that by his/her signature on the instrument,
each individual, or the person upon behalf of which the individual acted
executed the instrument.
/s/ Christina L. Pastor
-----------------------
Notary Public
(SEAL)
Exhibit J
CREDIT SUISSE SECURITIES (USA) LLC
VOLARIS VOLATILITY MANAGEMENT
DISCRETIONARY INVESTMENT MANAGEMENT
AGREEMENT FOR BLIND TRUSTS
This Investment Management Agreement is entered into this ___ day of
March, 2006 by and between CREDIT SUISSE SECURITIES (USA)LLC, a Limited
Liability Company, having its principal place of business at 11 Madison Avenue,
New York, NY 10010 ("Adviser") and Pitcairn Trust Company, a Pennsylvania
Corporation, with an address at 165 Township Line Rd Ste 3000, Jenkintown, PA
19046, as Trustee of the 2006 MRG/CPG Volaris Trust (the "Client").
Whereas, Adviser designs and monitors an option overlay and spreading
strategy that seeks to enhance returns and reduce volatility (the "Strategy");
and
Whereas, the assets identified on Exhibit A hereof are held in an
account (the "Account") established at and cleared and custodied with the
Adviser;
Whereas, the Client wishes to engage the Adviser to act as a
discretionary investment adviser to the Client implementing the Strategy with
respect to the assets of the Account;
Now, therefore, Client and Adviser agree as follows:
1. Appointment of Adviser.
----------------------
Client appoints Adviser as discretionary investment adviser for the
assets of the Account listed in Exhibit A attached hereto with full power and
authority to supervise and direct the investments of and for the Account in
conjunction with implementation of the Strategy without prior consultation with
Client. Client has elected the Strategy in accordance with direction from the
Settlors of the 2006 MRG/CPG Volaris Trust.
Adviser's investment decisions and advice for the Account shall be in
accordance with (i) the investment objectives and guidelines for the Account as
described in Exhibit B attached hereto ("Investment Guidelines"), (ii) the
Trust Agreement, (iii) any written instructions provided by Client to Adviser
and (iv) the information on the New Account Form executed by Client which is
incorporated by reference. It shall be the responsibility of Client to advise
Adviser in writing of any changes to any of the referenced documents.
Adviser is hereby appointed Client's agent with full power and
authority with respect to the Account assets: (a) to purchase or sell options
in accordance with the Investment Guidelines; (b) to execute transactions for
the Account itself and/or with one or more securities brokerage firms as
Adviser may select; (c) to sign and enter into on behalf of Client all
documentation necessary for the management of the Account as contemplated in
this Agreement, for which purpose Client appoints Agent attorney-in-fact; and
(d) to act on behalf of Client in all matters necessary or incidental to
management of the Account. This discretionary authority shall remain in full
force and effect until terminated pursuant to paragraph 14 hereof.
2. Services of Adviser.
-------------------
By executing this Agreement, Adviser accepts the appointment as
investment adviser and agrees to supervise and direct the investments of and
for the Account in accordance with Paragraph 1 and the Strategy. The
responsibilities of Adviser do not extend to any assets of the Account other
than those listed on Exhibit A attached hereto and any options purchased or
sold pursuant to clause (a) of paragraph 1 hereof. Adviser does not give legal,
tax or estate planning advice.
Except as may be otherwise required by law, the Adviser will not be
required to take any action or render any advice with respect to the voting of
proxies solicited by or with respect to the issuers of securities in which the
assets of the Account may be invested.
3. Representations of Adviser.
--------------------------
Adviser represents and warrants that it is and will at all times
during the term of this Agreement continue to be duly registered with the
Securities and Exchange Commission as an investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and is not an
affiliate of, controlled by or under common control with the issuer of the
assets held in the Account.
4. Representations and Indemnification by Client.
---------------------------------------------
Client represents and warrants that it is authorized by law and by the
terms of the governing document to act as Trustee of the 2006 MRG/CPG Volaris
Trust, and that as such has the authority to delegate to Adviser the investment
management of the Account as provided in this Agreement, and such delegation
has been accomplished in accordance with procedures and permitted by the
governing document and by law.
The execution and delivery of this Agreement by Client shall
constitute the representation that the terms hereof do not violate any
obligation by which Client is bound, whether arising by contract, operation of
law or otherwise, and that (a) this Agreement will be binding upon Client
2
in accordance with its terms; (b) the person executing this Agreement on behalf
of the Client is fully authorized to enter into this Agreement; (c) the Client
will deliver to the Adviser such evidence of such person's authority to execute
this Agreement on behalf of the Client as the Adviser may reasonably require;
(d) the Client received a copy of Part II of the Adviser's Form ADV more than
48 hours prior to execution of this Agreement; (e) the Client has received a
copy of and has read the document entitled Characteristics and Risks of
Standardized Options (document required to be sent to all clients prior to
effecting option transactions), and understands that the Adviser shall provide
a current copy of such document to the Client on request; and (f) the Client
has read, executed and understands the Risk Disclosure Statement Concerning
Derivatives attached as Exhibit C.
Client represents and warrants that all information it provides to
Adviser pursuant to Paragraph 6(d) hereof will be accurate and complete in all
material respects. Client agrees to indemnify and hold harmless Adviser, its
affiliates and its assignees (each such person, an "Indemnified Party") from
and against any and all losses, claims, damages and liabilities, joint or
several, to which such Indemnified Party may become subject, and relating to or
arising out of any breach of such representation and warranty, and will
reimburse any Indemnified Party for all expenses (including reasonable counsel
fees and expenses) as they are incurred in connection with the investigation
of, preparation for or defense or settlement of any pending or threatened claim
or any action, suit or proceeding arising therefrom, whether or not such claim,
action, suit or proceeding is initiated or brought by or on behalf of Client.
5. Transaction Procedures; Brokerage.
---------------------------------
Adviser may, but is not obligated to, aggregate purchase or sale
orders with those of other client accounts when executing transactions on
behalf of Client.
Unless otherwise directed, in exercising the authority granted to it
to place orders for the purchase or sale of securities and/or other financial
instruments, Adviser is authorized to execute transactions itself and/or
establish and maintain brokerage accounts, select any broker or dealer
(including any broker-dealer affiliated with Adviser) and negotiate commissions
and fees to be paid on such transactions, subject to a continuing obligation to
seek to obtain the best price, execution and overall terms. In instances where
the Adviser (as a registered broker-dealer) executes transactions, the Client
will pay brokerage commissions at the posted rates of Adviser unless otherwise
agreed in writing prior to the execution of this Agreement.
3
6. Execution of Transactions by Adviser.
------------------------------------
a. Principal Transactions
Before the completion of any transaction in which the Adviser proposes
to act as principal, the Adviser will disclose to the Client the Adviser's
capacity as principal and will obtain the Client's consent to such principal
transaction.
b. Authorization of Agency Cross Transactions
Pursuant to Section 206(3) of the Investment Advisers Act of 1940 and
Rule 206(3)-2 promulgated thereunder, the Client authorizes the Adviser to
effect agency cross transactions for the Account and understands that with
respect to agency cross transactions the Adviser will act as broker for, and
receive commissions from, and have a potentially conflicting division of
loyalties and responsibilities regarding both parties to such transactions. The
Client may revoke this authorization at any time upon written notice to the
Adviser.
c. Authorization to Effect Transactions
If the Account is subject to Section 11(a) of the 1934 Act and Rule
11a2-2(T) thereunder (or any similar rule which may be adopted in the future),
it is agreed that, unless otherwise instructed by Client in writing, Adviser
may retain commissions in connection with effecting any securities transactions
for the Account. To the extent applicable, Adviser will furnish Client with all
reports required by law.
d. Rule 144 of the Securities Act of 1933 ("Rule 144")
With respect to transactions, including but not limited to any sales,
covered call writing programs, derivative strategies, or other transactions
contemplated herein, Adviser shall transact in such securities in compliance
with Rule 144. Client shall promptly give notice to Adviser of any information
it may have concerning any intended dispositions or deemed dispositions of any
securities which may be aggregated with or attributable to Client for Rule 144
purposes prior to such disposition or deemed disposition, which may include,
but not be limited to gifts, sales, hedging activities, or other transfers. In
addition, Adviser shall promptly give notice to Client of any actions taken by
the Adviser that may be aggregated with or attributable to Client for Rule 144
purposes prior to such disposition or deemed disposition, which may include,
but not be limited to gifts, sales, hedging activities, or other transfers.
Adviser shall make all necessary Rule 144 filings on behalf of Client
that are required by the Adviser's activities pursuant to this Agreement in
such manner as is required by Rule 144.
4
Client shall promptly supply Adviser with all information necessary for Adviser
to complete such filings relating to the Adviser's activities in a timely
fashion. Client shall keep complete and accurate records of the number of
shares with respect to which Rule 144 filings have been made and which Adviser
has reported to the Client have been sold. Client shall notify Adviser when
Client believes that additional Rule 144 filings are required, so that Client
and Adviser can coordinate on the filing by Client of Rule 144 filings and the
transactions by Adviser contemplated herein. Notwithstanding anything to the
contrary contained in this Agreement, if Adviser in its sole discretion
reasonably believes that it has insufficient information necessary for Adviser
to comply with Rule 144 and its filing obligations hereunder, Adviser shall
have full power and authority to not engage in any transaction for which such
filing may be necessary and to take any other action or actions with respect to
the Account assets that it reasonably determines to be appropriate under the
circumstances until it receives the requisite information.
7. Authorization to Aggregate Orders and to Average Pricing.
--------------------------------------------------------
The Client hereby authorizes the Adviser to aggregate purchases and
sales of securities for the Account with purchases and sales of securities of
the same issuer for other clients of the Adviser occurring on the same day.
When transactions are so aggregated, the actual prices applicable to the
aggregated transaction will be averaged, and the Account will be deemed to have
purchased or sold its proportionate share of the securities involved at the
average price so obtained. Average pricing will be used in both agency and
principal trades in reported securities (those that are listed on an exchange
or designated as national market securities.)
8. Limit of Liability.
------------------
Client represents that (a) it recognizes the inherent market
fluctuation risks which surround the investment and reinvestment of assets; (b)
it is aware of the possible losses on the transactions in which Adviser will
engage for the Account, and it is financially capable of bearing such losses;
and (c) it has not received any written or verbal guarantees of performance of
the Account and understands that no representative or agent of Adviser is
authorized to make any such guarantees or representations now or in the future.
To the extent permitted by law, Adviser shall not be liable for any
error of judgment or for any loss suffered by the Client in connection with the
subject matter of this Agreement, except loss resulting from willful
misconduct, bad faith or gross negligence in the performance by Adviser of its
duties, or by reason of Adviser's reckless disregard of its obligations and
duties under this Agreement. Under certain circumstances, these laws may impose
liabilities on persons who act in good faith. Client expressly understands and
agrees that Adviser does not guarantee that a specific result will be achieved
through Adviser's management of the account.
Adviser shall not be responsible for any loss incurred by reason of
any act or omission of Client or any third party, other than any third party
controlled by, or under common control with,
5
Adviser. Adviser shall be fully protected in acting upon any instruction
believed by it to be genuine and signed or communicated by or on behalf of
Client, and Adviser shall be under no duty to make any investigation or inquiry
regarding any Client instruction. Adviser does not assume responsibility for
the accuracy of information furnished by any third party on which it reasonably
relies.
9. Fees.
----
As compensation for the services provided by the Adviser under this
Agreement, the Client will pay the Adviser a fee in accordance with the fee
schedule described in Exhibit D to this Agreement which may only be amended in
writing by the parties. This fee for the Adviser's services with respect to the
Account shall be paid by debiting the Account quarterly in arrears at the end
of each calendar quarter in accordance with the attached fee schedule. The
initial fee will be assessed pro rata in the event this Agreement becomes
effective other than as of the first of the calendar quarter based on the
number of days during the quarter the assets were held in the Account.
To the extent that there is insufficient cash or cash equivalents in
the Account to cover the fee payable to Adviser in accordance with the fee
schedule described in Exhibit D of this Agreement, Adviser will send an
advisory fee calculation report to the Client. Client acknowledges that Adviser
charges interest on the debit balance in the Account until such balance is
satisfied. Fees paid in advance of a termination pursuant to paragraph 12 of
this Agreement will be prorated to the date of termination, and any unearned
portion thereof will be refunded to the Client.
10. Reporting/Valuation.
-------------------
Adviser will provide Client with a monthly statement for any month
during which there is trading activity in the Account and Adviser will also
provide annual reports reflecting realized and unrealized gains and losses in
the Account.
Adviser will provide Client with a valuation report of the Account as
of the last day of each calendar quarter. The Account shall be valued in such
manner as shall be determined in good faith by Adviser to reflect fair market
value and the reports will reflect any information that Client shall request in
order to satisfy its oversight responsibility as Trustee. It is agreed that
Adviser, in the maintenance of its records, does not assume responsibility for
the accuracy of information furnished by the Client and its agents. Client
understands that this report shall not be used for tax reporting purposes.
Adviser will use its reasonable best efforts to obtain access to
custody information for the Accounts through an online interface.
6
11. Notice.
------
Any notice, instructions or other communications required or
contemplated by this Agreement shall be in writing and shall be addressed to
the recipient at the address first above written, except that either party may
by notice designate a different address for such party.
12. Termination.
-----------
This Agreement may be terminated by either party at any time upon 30
days' written notice to the other party, which notice shall be effective when
received by the other party. The termination of this Agreement shall not affect
any obligation or liability of the Client for any transaction entered into or
obligation incurred by the Client or on the Client's behalf prior to such
termination.
13. Assignment; Delegation.
----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors, heir and assigns; provided, however, that no
"assignment" of this Agreement (as such term is defined by the Investment
Advisers Act of 1940 and the rules thereunder) shall be made by Adviser or
Client without the consent of the other party. Client understands that, as a
result of this provision, a transaction involving Adviser that does not result
in a change in the actual management or actual control of Adviser will not
constitute an assignment and thus, no Client consent need be obtained in the
event of such a transaction.
14. Confidentiality.
---------------
Pursuant to Regulation S-P adopted by the Securities and Exchange
Commission, all nonpublic personal information provided by the Client to
Adviser shall be held confidential by the Adviser; unless (i) the Adviser is
authorized in writing by the Client to disclose such information to individuals
and/or entities not affiliated with the Adviser; (ii) required to do so by
judicial or regulatory process; (iii) it is necessary to carry out the purpose
of this Agreement; or (iv) otherwise permitted to do so in accordance with the
parameters of Regulation S-P. All recommendations, advice or other work product
of the Adviser developed under the terms of this Agreement and disclosed to the
Client shall be treated as confidential, except as required by law to be
disclosed.
15. Construction; Governing Law.
---------------------------
Headings used in this Agreement are for convenience only, and shall
not affect the construction or interpretation of any of its provisions.
7
This Agreement shall be interpreted and construed in accordance with
the internal substantive laws (and not the choice of law rules) of the State of
New York. All actions and proceedings brought by either Party relating to or
arising from, directly or indirectly, this Agreement shall only be litigated in
courts located within the State of New York. The Parties hereby submit to the
personal jurisdiction of such courts; hereby waive personal service of process
upon it and consent that any such service of process may be made by certified
or registered mail, return receipt requested, directed to it at its address
last specified for Notices hereunder, and service so made shall be deemed
completed five (5) days after the same shall have been so mailed; and hereby
waive the right to a trial by jury in any action or proceeding with the other
Party.
16. Non-Waiver of Rights.
--------------------
Nothing herein shall in any way constitute a waiver or limitation of
any rights that Client may have under applicable federal or state laws.
17. Entire Agreement; Amendment.
---------------------------
This Agreement is the entire agreement between the parties as to the
subject matter covered herein and supersedes all prior agreements and
understandings of the parties in connection therewith. If there is any
inconsistency or conflict between this Agreement and any other agreement
between Adviser and Client relating to the Account, the terms and provisions of
this Agreement shall control. If any provision of this Agreement shall be held
or made invalid by statute, rule, regulation, decision of a tribunal or
otherwise, the remainder of this Agreement shall not be affected and, to this
extent, the provisions of this Agreement shall be deemed to be severable. This
Agreement may not be modified or amended except in a writing signed by the
parties.
18. Disclosures.
-----------
a. The Adviser shall not be liable hereunder for any failure to
recommend the purchase or sale of any security on behalf of the Client when, in
the Adviser's opinion, such transaction (i) may be contrary to policies and
procedures applicable to the Adviser, including those policies and procedures
designed to avoid the misuse or appearance of misuse of nonpublic information;
or (ii) may constitute a violation of any federal or state law, rule or
regulation or a breach of any fiduciary or confidential relationship between
Adviser or any of Adviser's officers or employees and any other person or
persons.
b. The Client understands that the Adviser's investment banking
division is the regular investment banker for a number of major corporations
and, from time to time, performs investment banking services for other
companies as well. The Adviser believes that the
8
nature and range of clients to whom it renders such investment banking services
is such that it would be inadvisable to exclude these companies from the
Account's portfolio. Accordingly, unless the Client instructs the Adviser to
the contrary, it is likely that the Client's holdings will include the
securities of corporations for whom the Adviser performs investment banking
services. Moreover, the Client's portfolio may include the securities of
companies in which the Adviser or its officers or employees have positions,
long or short.
c. The Client understands that the Adviser's opinions,
recommendations and actions will be based on information deemed by the Adviser
to be reliable, but not guaranteed to or by the Adviser. The Client agrees that
the Adviser shall not in any way be liable for any error in judgment or any act
or omission, provided that the Adviser acts in good faith, except as may be
otherwise provided in applicable federal and state securities laws.
d. The Client understands that the Adviser in performance of its
obligations and duties under this Agreement is entitled to rely upon the
accuracy of information furnished by Client or on the Client's behalf, without
further investigation.
e. The Client agrees that the Adviser will not be liable for any
losses, costs or claims resulting from the Client's failure to notify the
Adviser pursuant to paragraph 1 of this Agreement of any modifications or
amendments to the Investment Guidelines or the Trust.
f. The Client understands that the Adviser and/or its directors,
officers and employees handles accounts for, and renders investment advice and
other investment management and broker-dealer services to other investors and
institutions with respect to, and it may for its own account hold, purchase,
sell or otherwise trade in and deal with securities which are the same as or
similar to those which the Adviser purchases, sells, or otherwise trades in for
the Investment Account, and that the same security will not always be bought or
sold at the same price for each account. The Adviser shall be in all respects
free to take action with respect to investments in securities for the
Investment Account which is the same as or different from the action taken by
it and/or any of the above-mentioned persons in handling such other accounts or
rendering such other investment management or broker-dealer services or with
respect to its or their investments in Securities. To the extent practicable,
it is the Adviser's policy to allocate investment opportunities to the
Investment Account over a period of time on a fair and equitable basis relative
to other investors and institutions.
19. Counterparts.
------------
This Agreement may be executed in one or more counterparts each of
which when executed and delivered shall be an original and both counterparts
together shall constitute one and the same instrument.
9
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the first date written above.
THE CLIENT ACKNOWLEDGES RECEIVING A COPY OF THIS AGREEMENT.
PITCAIRN TRUST COMPANY, Trustee of the 2006 MRG/CPG Volaris Trust
By: _____________________________
Name:
Title:
CREDIT SUISSE SECURITIES (USA) LLC
__________________________________
Branch Manager
__________________________________
Managing Director
10
Exhibit K
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned hereby
constitutes, designates and appoints any one individual from Group A (as
defined below) and any one individual from Group B (as defined below), taken
together, jointly, as such person's true and lawful attorneys-in-fact and
agents for the undersigned and in the undersigned's name, place and stead, in
any and all capacities, to execute, acknowledge, deliver and file any and all
filings required by the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including Sections 13 and 16 of such act, and the rules and
regulations thereunder, and the Securities Act of 1933, as amended (the
"Securities Act"), including Rule 144 and the other rules and regulations
thereunder, and all documents in connection with such filings, respecting
securities of American International Group, Inc., a Delaware corporation,
including but not limited to Forms 3, 4 and 5 and Schedules 13D and 13G under
the Exchange Act and Form 144 under the Securities Act and any amendments
thereto and successor forms and schedules thereto.
Group A shall consist of the following individuals: Edward E. Matthews,
Howard I. Smith and Bertil P-H Lundqvist. Group B shall consist of the
following individuals: Jeffrey W. Tindell, Michael P. Rogan, Stephen W.
Hamilton, Todd E. Freed and Leif B. King.
This power of attorney shall be valid from the date hereof until revoked
by the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 1st day of March, 2006.
Signed: /s/ Maurice R. Greenberg
----------------------------
Name: Maurice R. Greenberg
Exhibit M
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned hereby
constitutes, designates and appoints any one individual from Group A (as
defined below) and any one individual from Group B (as defined below), taken
together, jointly, as such person's true and lawful attorneys-in-fact and
agents for the undersigned and in the undersigned's name, place and stead, in
any and all capacities, to execute, acknowledge, deliver and file any and all
filings required by the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including Sections 13 and 16 of such act, and the rules and
regulations thereunder, and the Securities Act of 1933, as amended (the
"Securities Act"), including Rule 144 and the other rules and regulations
thereunder, and all documents in connection with such filings, respecting
securities of American International Group, Inc., a Delaware corporation,
including but not limited to Forms 3, 4 and 5 and Schedules 13D and 13G under
the Exchange Act and Form 144 under the Securities Act and any amendments
thereto and successor forms and schedules thereto.
Group A shall consist of the following individuals: Edward E. Matthews,
Howard I. Smith and Bertil P-H Lundqvist. Group B shall consist of the
following individuals: Jeffrey W. Tindell, Michael P. Rogan, Stephen W.
Hamilton, Todd E. Freed and Leif B. King.
This power of attorney shall be valid from the date hereof until revoked
by the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 24th day of February, 2006.
STARR INTERNATIONAL COMPANY, INC.
By: /s/ Edward E. Matthews
---------------------------
Name: Edward E. Matthews
Title: Managing Director
Exhibit O
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned hereby
constitutes, designates and appoints any one individual from Group A (as
defined below) and any one individual from Group B (as defined below), taken
together, jointly, as such person's true and lawful attorneys-in-fact and
agents for the undersigned and in the undersigned's name, place and stead, in
any and all capacities, to execute, acknowledge, deliver and file any and all
filings required by the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including Sections 13 and 16 of such act, and the rules and
regulations thereunder, and the Securities Act of 1933, as amended (the
"Securities Act"), including Rule 144 and the other rules and regulations
thereunder, and all documents in connection with such filings, respecting
securities of American International Group, Inc., a Delaware corporation,
including but not limited to Forms 3, 4 and 5 and Schedules 13D and 13G under
the Exchange Act and Form 144 under the Securities Act and any amendments
thereto and successor forms and schedules thereto.
Group A shall consist of the following individuals: Edward E. Matthews,
Howard I. Smith and Bertil P-H Lundqvist. Group B shall consist of the
following individuals: Jeffrey W. Tindell, Michael P. Rogan, Stephen W.
Hamilton, Todd E. Freed and Leif B. King.
This power of attorney shall be valid from the date hereof until revoked
by the undersigned.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
the 21st day of February, 2006.
UNIVERSAL FOUNDATION INC.
By: /s/ Stuart Osborne
-------------------------------
Name: Stuart Osborne
Title: President
