EXHIBIT 10.19
▇▇▇▇▇▇ OIL CORPORATION
RABBI TRUST
THIS AGREEMENT made this day of ___________, 1999, by and between
▇▇▇▇▇▇ Oil Corporation (the "Company") and (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Company has adopted the ▇▇▇▇▇▇ Oil Corporation
Supplemental Executive Retirement Plan (the "Plan") with an initial effective
date of January 12, 1999, a copy of which is attached hereto as Appendix A,
pursuant to which the Company has agreed to pay certain benefits to eligible
employees upon the occurrence of certain events as described in the Plan; and
WHEREAS, the Company wishes to establish a trust (the "Trust") and to
contribute to the Trust assets that shall be held therein, subject to the claims
of the Company's creditors in the event of the Company's Insolvency, as herein
defined, to serve as a reserve for the discharge of the Company's obligations
under the Plan to participants as of the initial effective date of the Plan,
until such benefits are paid to Plan participants and their beneficiaries in
such manner and at such times as specified in the Plan; and
WHEREAS, it is the intention of the parties that the Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
and
WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide itself with a source of funds to assist it in meeting its
obligations under the Plan to participants as of the initial effective date of
the Plan;
WHEREAS, the Trust shall not be used as a source of funds to assist in
satisfying any liabilities accrued with respect to participants who enter the
Plan on or after the initial effective date of the Plan, and such participants'
benefits, instead, shall be paid from the general assets of the Company or
another unfunded trust arrangement;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held, and disposed of in accordance with the
terms of this agreement ("Trust Agreement") as follows:
SECTION 1. ESTABLISHMENT OF TRUST
(a) The Company hereby deposits with the Trustee in trust
________________________ ($_________), which shall become the principal of the
Trust to be held, administered, and disposed of by the Trustee as provided in
this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the Company
is the grantor (within the meaning of subpart E, part I, subchapter J, chapter
1, subtitle A of the Internal Revenue Code of 1986, as amended) and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon, shall be held
separate and apart from other funds of the Company and shall be used exclusively
for the uses and purposes of Plan participants and general creditors as herein
set forth. Plan participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against the
Company. Any assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Within seven (7) days following the date this Trust is executed,
the Company shall be required to irrevocably deposit additional cash or other
property to the Trust in an amount which is determined by an independent actuary
selected by the Company to be sufficient to pay each Plan participant or
beneficiary, as of the initial effective date of the Plan, the benefits payable
pursuant to the terms of the Plan, such amount to be determined as of the close
of the applicable Plan year(s).
(f) The principal of the Trust, and any earnings thereon used to pay
Plan benefits, shall be used solely to pay Plan participants as of the initial
effective date of the Plan, and beneficiaries of such participants. Any other
such individuals entitled to benefits under the Plan shall not be entitled to a
payment from the Trust. Instead, such benefits shall be paid from the general
assets of the Company or another unfunded trust arrangement.
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
(a) At such time as a Plan participant is entitled to a payment under
the Plan (as determined by the Trustee after having been notified in writing by
the Company of the Plan participant's entitlement to the payment), the Plan
participant shall receive payment from the Trust Fund in an amount equal to the
benefits to which such Plan participant is entitled under the terms of the Plan.
In such event, the Trustee shall be empowered to liquidate such portion of the
Trust Fund as may be available and necessary, or to take such actions as the
Trustee deems appropriate, to satisfy the Company's obligations under the Plan.
If payment required under the terms of the Plan has not been made to the Plan
participant (whether due to the failure of the Company to notify the Trustee as
required by this paragraph or otherwise), the Plan participant may notify the
Trustee in writing of the amount (or a reasonable estimate of the amount) due
the Plan participant pursuant to the Plan and the date such amount was due and
payable. The Trustee shall notify the Company within fifteen (15) days of the
receipt of such payment request. If the Company and the Plan participant do not
agree as to whether the Plan participant is entitled to a payment, the Trustee
shall apply to a court of competent jurisdiction for instructions as to whether
the distribution should be made. The Trustee shall be reimbursed from the Trust
Fund for any reasonable costs incurred by the Trustee in connection with such
litigation. If the Trust Fund is insufficient to pay such costs, then the
Company shall reimburse the Trustee. Notwithstanding the preceding sentences, if
a final determination is made that the Plan participant is not entitled to such
payment and it is determined the participant's claim for payment which resulted
in the Trustee's legal action was not made in good faith, the Plan participant,
rather than the Company, shall reimburse the Trustee and/or the Trust Fund for
any such expenses. To the extent, however, that the participant does not
reimburse any expenses paid by the Trustee for which there are not sufficient
Trust Assets to pay, such amounts shall be reimbursed by the Company.
(b) The Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms of the
Plan. The Company shall notify the Trustee of its decision to make payment of
benefits directly prior to the time amounts are payable to participants or their
beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in accordance with the
terms of the Plan, the Company shall make the balance of each such payment as it
falls due directly to the Plan participant pursuant to the provisions of the
Plan and the Trustee shall not be liable to the Plan participant for the
insufficiency. The Trustee shall notify the Company where principal and earnings
are not sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN THE COMPANY IS INSOLVENT
(a) The Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Company is Insolvent. The Company shall be
considered "Insolvent" for purposes of this Trust Agreement if (1) the Company
is unable to pay its debts as they become due or (2) the Company is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Company under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the
Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is Insolvent
and, pending such determination, the Trustee shall discontinue payment
of benefits to Plan participants or their beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent, the
Trustee shall have no duty to inquire whether the Company is Insolvent.
The Trustee may in all events rely on such evidence concerning the
Company's solvency as may be furnished to the Trustee and that provides
the Trustee with a reasonable basis for making a determination
concerning the Company's solvency.
(3) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the assets of the
Trust for the benefit of the Company's general creditors. Nothing in
this Trust Agreement shall in any way diminish any rights of Plan
participants or their beneficiaries to pursue their rights as general
creditors of the Company with respect to benefits due under the Plan or
otherwise.
(4) The Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of
this Trust Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent) or pursuant to an
order of a court of competent jurisdiction.
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(a) and
(b) hereof and subsequently resumes such payments, the first payment following
such discontinuance shall include the aggregate amount of all payments due to
Plan participants or their beneficiaries under the terms of the Plan for the
period of such discontinuance, less the aggregate amount of any payments made to
Plan participants or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4. PAYMENTS TO THE COMPANY
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, the Company shall have no right or power to direct the Trustee to
return to the Company, or to divert to others, any of the Trust assets before
all payment of benefits have been made to Plan participants, as of the initial
effective date of the Plan, and their beneficiaries pursuant to the terms of the
Plan.
SECTION 5. INVESTMENT AUTHORITY OF THE TRUSTEE
(a) In no event may the Trustee invest in securities (including stock
or rights to acquire stock) or obligations issued by the Company, other than a
de minimis amount held in common investment vehicles in which the Trustee
invests. All rights associated with assets of the Trust shall be exercised by
the Trustee or the person designated by the Trustee, and shall in no event be
exercisable by or rest with Plan participants.
(b) Subject to any other limitations stated elsewhere in this Trust
Agreement, and in addition to the authority, rights, privileges, powers, and
duties elsewhere herein vested in the Trustee, the Trustee shall also have the
following investment powers:
(1) To hold, manage, control, collect, and use the
Trust in accordance with the terms of this instrument;
(2) To sell (for cash or on credit, or both), exchange, or
otherwise dispose of the whole or any part of the Trust at public or
private sale; to lease (including, but not limited to, oil, gas, or
mineral leases), rent, mortgage (including purchase money mortgages),
pledge, or otherwise encumber the whole or any part of the Trust; and
to loan or borrow money in any manner, including by joint and several
obligations, all upon such terms, regardless of the duration of the
Trust, as the Trustee may deem advisable (provided that neither the
Company nor any participant may borrow from the Trust except as
otherwise permitted herein);
(3) To invest or reinvest the Trust in property of any
description whatsoever (including, but not limited to, oil, gas, or
mineral interests; common or preferred stock; shares of investment
trusts or companies; bills, notes, and other evidences of indebtedness;
non-income producing property; and property outside of Texas);
(4) To make or hold investments of any part of the Trust in
common or undivided interest with other persons or entities, including
an undivided interest in any property in which the Trustee,
individually or otherwise, may hold an undivided interest; to buy from
or sell to any person or entity to the extent not otherwise prohibited
herein;
(5) To make commingled, collective, or common investments and
to invest and reinvest all or any portion of the Trust collectively,
including, without limitation, power to invest collectively with such
other funds through the medium of one or more of the common,
collective, or commingled trust funds, which has been or may hereafter
be established and maintained by the Trustee or its affiliates. To the
extent of the interest of the Trust in any such collective trust, the
agreement or declaration of trust establishing such collective trust
shall be deemed to be adopted and made a part of the Plan(s) and Trust
as if set forth in full herein;
(6) To deposit or invest all or a part of the Trust in savings
accounts, certificates of deposit, or other deposits that bear a
reasonable rate of interest in a bank or similar financial institution,
including the commercial department of the Trustee, if such bank or
other institution is supervised by any agency of a state or the federal
government;
(7) To employ and compensate such attorneys, counsel, brokers,
banks, investment advisors, or other agents, employees, or independent
contractors and to delegate to them such of the duties, rights, and
powers of the Trustee as may be deemed advisable in handling and
administering the Plan;
(8) To partition any property or interest held as a part of
the Trust and, in any and all such partitions, to pay or receive such
money or property as may be necessary or advisable to equalize
differences and to evaluate any property belonging to the Trust;
(9) To institute, join in, maintain, defend, compromise,
submit to arbitration, or settle any litigation, claim, obligation, or
controversy with respect to any matter affecting the Trust, regardless
of the manner in which such matter may have arisen, all in the name of
the Trustee;
(10) To hold uninvested for a reasonable period of time any
moneys received by it until the same shall be invested or disbursed
pursuant to the provisions of the Plan;
(11) To invest or reinvest from time to time any part or all
of the Trust in securities of an open-end management investment trust
or investment company registered under the Investment Company Act of
1940, as amended, including any such investment trust or company for
which the Trustee or one of its affiliates acts as investment advisor,
custodian, transfer agent, registrar, sponsor, distributor, manager, or
otherwise;
(12) To exercise, personally or by general or limited power of
attorney, any right, including the right to vote or grant proxies,
discretionary or otherwise, appurtenant to any assets held by the
Trust, and the right to participate in voting trusts with other
stockholders;
(13) To register any securities or other property held by it
hereunder in the name of the Trustee or in the names of nominees with
or without the addition of words indicating that such securities or
other property are held in a fiduciary capacity, to take and hold the
same unregistered or in form permitting transferability by delivery, to
deposit or arrange for the deposit of securities in a qualified central
depository even though, when so deposited, such securities or other
property may be held in the name of the nominee of such depository with
other securities deposited therein by other persons, or to deposit or
to arrange for the deposit of any securities or other property issued
by the United States government, or any agency or instrumentality
thereof, with a Federal Reserve bank, provided that the books and
records of the Trustee shall at all times disclose that all such
securities or other property are part of the Trust.
SECTION 6. DISPOSITION OF INCOME
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY THE TRUSTEE
The Trustee shall keep records in reasonable detail of all investments,
receipts, disbursements and all other transactions required with respect to the
Trust Fund, including such specific records as shall be agreed upon in writing
by the Company and the Trustee. Within sixty (60) days following the close of
each calendar year and within sixty (60) days after the removal or resignation
of the Trustee, the Trustee shall deliver to the Company a written account of
its administration of the Trust during such year or during the period from the
close of the last preceding year to the date of such removal or resignation,
setting forth all investments, receipts, disbursements, and other transactions
effected by it, including a description of all securities and investments
purchased and sold with the cost or net proceeds of such purchases or sales
(accrued interest paid or receivable being shown separately), and showing all
cash, securities, and other property held in the Trust at the end of such year
or as of the date of such removal or resignation, as the case may be.
SECTION 8. RESPONSIBILITY OF THE TRUSTEE
(a) The Trustee accepts the Trust fund hereunder and agrees to accept
and retain, manage, administer, and hold the Trust fund in accordance with the
terms of this Trust Agreement. The Trustee shall act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims; provided,
however, that the Trustee shall incur no liability to any person for any action
taken pursuant to a direction, request or approval given by the Company, which
is contemplated by, and in conformity with, the terms of the Plan or this Trust
and is given in writing by the Company.
(b) In the event of a dispute between the Company and a party, the
Trustee may apply to a court of competent jurisdiction to resolve the dispute.
(c) Except as otherwise provided herein, if the Trustee undertakes or
defends any litigation arising in connection with this Trust, the Company agrees
to indemnify the Trustee against the Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses) relating thereto
and to be primarily liable for such payments.
(d) The Trustee may consult with legal counsel (who may also be counsel
for the Company generally) with respect to any of its duties or obligations
hereunder.
(e) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants, or other professionals to assist it in
performing any of its duties or obligations hereunder.
(f) The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein;
provided, however, that if an insurance policy is held as an asset of the Trust,
the Trustee shall have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(g) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 9. COMPENSATION AND EXPENSES OF THE TRUSTEE
The Company shall pay all administrative and the Trustee's fees and
expenses. If not so paid, such fees and expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF THE TRUSTEE
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective thirty (30) days after receipt of such notice,
unless the Company and the Trustee agree otherwise.
(b) Except as provided in Section 10(c), the Trustee may be removed by
the Company on sixty (60) days written notice or upon shorter notice accepted by
the Trustee.
(c) Upon a Change of Control, as defined in Section 13(d) herein, the
Trustee may not be removed by the Company for three (3) years.
(d) If the Trustee resigns, or is removed, within three (3) years of a
Change of Control as defined in Section 13(d) herein, the Trustee shall select a
successor Trustee in accordance with the provisions of Section 11(b) hereof
prior to the effective date of the Trustee's resignation or removal.
(e) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within thirty (30) days after receipt
of notice of resignation, removal or transfer, unless the Company extends the
time limit.
(f) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraph (a) or (b) of this Section. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor Trustee or for instructions. All
expenses of the Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR TRUSTEE
(a) If the Trustee resigns or is removed in accordance with Section
10(a) or (b) hereof, the Company may appoint any third party, such as a bank
trust department or other party that may be granted corporate trustee powers
under state law, as a successor to replace the Trustee upon resignation or
removal. The appointment shall be effective when accepted in writing by the new
Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by the Company or the successor
Trustee to evidence the transfer.
(b) If the Trustee resigns or is removed pursuant to the provisions of
Section 10(d)hereof and selects a successor Trustee, the Trustee may appoint any
third party such as a bank trust department or other party that may be granted
corporate trustee powers under state law. The appointment of a successor Trustee
shall be effective when accepted in writing by the new Trustee. The new Trustee
shall have all the rights and powers of the former Trustee, including ownership
rights in Trust assets. The former Trustee shall execute any instrument
necessary or reasonably requested by the successor Trustee to evidence the
transfer.
SECTION 12. AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall (i) cause the Trust to be used to fund benefits for participants
who enter the Plan on or after the initial effective date of the Plan, (ii)
conflict with the terms of the Plan(s) or (iii) make the Trust revocable after
it has become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Plan
participants, as of the effective date of the Plan, and their beneficiaries are
no longer entitled to benefits pursuant to the terms of the Plan. Upon
termination of the Trust any assets remaining in the Trust shall be returned to
the Company.
(c) Sections 1, 2, 4, 6,10, and this Section 12(c) of this Trust
Agreement may not be amended by the Company for three (3) years following a
Change of Control, as defined herein.
SECTION 13. MISCELLANEOUS
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered, or subjected to attachment,
garnishment, levy, execution, or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Texas.
(d) For purposes of this Trust, a "Change of Control" shall mean (i)
the purchase or other acquisition by any person, entity, or group of persons,
within the meaning of section 13(d) or 14(d) of the Securities Exchange Act of
1934 ("Act"), or any comparable successor provisions, of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Act) of 30 percent or
more of either the outstanding shares of common stock or the combined voting
power of the Company's then outstanding voting securities entitled to vote
generally, (ii) the approval by the stockholders of the Company of a
reorganization, merger, or consolidation, in each case, with respect to which
persons who were stockholders of the Company immediately prior to such
reorganization, merger or consolidation do not, immediately thereafter, own more
than 50 percent of the combined voting power entitled to vote generally in the
election of directors of the reorganized, merged or consolidated Company's then
outstanding securities, (iii) a liquidation or dissolution of the Company or
(iv) the sale of all or substantially all of the Company's assets.
SECTION 14. EFFECTIVE DATE
The effective date of this Trust Agreement shall be January 12, 1999.
EXECUTED on this _____ day of ___________, 1999.
▇▇▇▇▇▇ OIL CORPORATION
"Company"
By:
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"Trustee"
By: