EXHIBIT 10.12
DEFERRED COMPENSATION PLAN
THE J. ▇▇▇▇ GROUP, INC.
TRUST AGREEMENT
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TRUST AGREEMENT
TABLE OF CONTENTS
ARTICLE PAGE
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ARTICLE 1 NAME, INTENTIONS, IRREVOCABILITY, DEPOSIT AND DEFINITIONS....................................1
1.1 NAME.........................................................................................1
1.2 INTENTIONS...................................................................................1
1.3 IRREVOCABILITY; CREDITOR CLAIMS..............................................................1
1.4 INITIAL DEPOSIT..............................................................................2
1.5 ADDITIONAL DEFINITIONS.......................................................................2
1.6 GRANTOR TRUST................................................................................2
ARTICLE 2 GENERAL ADMINISTRATION.......................................................................2
2.1 COMMITTEE DIRECTIONS AND ADMINISTRATION......................................................2
2.2 CONTRIBUTIONS................................................................................3
2.3 TRUST FUND...................................................................................3
2.4 DISTRIBUTION OF EXCESS TRUST FUND TO EMPLOYERS...............................................3
ARTICLE 3 POWERS AND DUTIES OF TRUSTEE.................................................................3
3.1 INVESTMENT DIRECTIONS........................................................................3
3.2 MANAGEMENT OF INVESTMENTS....................................................................4
3.3 SECURITIES...................................................................................6
3.4 SUBSTITUTION.................................................................................6
3.5 DISTRIBUTIONS................................................................................7
3.6 TRUSTEE RESPONSIBILITY REGARDING PAYMENTS ON INSOLVENCY......................................9
3.7 COSTS OF ADMINISTRATION.....................................................................10
3.8 TRUSTEE COMPENSATION AND EXPENSES...........................................................11
3.9 PROFESSIONAL ADVICE.........................................................................11
3.10 PAYMENT ON COURT ORDER......................................................................11
3.11 PROTECTIVE PROVISIONS.......................................................................11
3.12 INDEMNIFICATIONS............................................................................12
ARTICLE 4 INSURANCE CONTRACTS.........................................................................13
4.1 TYPES OF CONTRACTS..........................................................................13
4.2 OWNERSHIP...................................................................................13
4.3 RESTRICTIONS ON TRUSTEE'S RIGHTS............................................................13
4.4 TRUSTEE'S DUTIES............................................................................13
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ARTICLE 5 TRUSTEE'S ACCOUNTS..........................................................................13
5.1 RECORDS.....................................................................................13
5.2 ANNUAL ACCOUNTING; FINAL ACCOUNTING.........................................................14
5.3 VALUATION...................................................................................14
5.4 DELEGATION OF DUTIES........................................................................15
ARTICLE 6 RESIGNATION OR REMOVAL OF TRUSTEE...........................................................15
6.1 RESIGNATION; REMOVAL........................................................................15
6.2 SUCCESSOR TRUSTEE...........................................................................15
6.3 SETTLEMENT OF ACCOUNTS......................................................................15
ARTICLE 7 CONTROVERSIES, LEGAL ACTIONS AND COUNSEL....................................................16
7.1 CONTROVERSY.................................................................................16
7.2 JOINDER OF PARTIES..........................................................................16
7.3 EMPLOYMENT OF COUNSEL.......................................................................16
ARTICLE 8 INSURERS....................................................................................16
8.1 INSURER NOT A PARTY.........................................................................16
8.2 AUTHORITY OF TRUSTEE........................................................................16
8.3 CONTRACT OWNERSHIP..........................................................................16
8.4 LIMITATION OF LIABILITY.....................................................................17
8.5 CHANGE OF TRUSTEE...........................................................................17
ARTICLE 9 AMENDMENT AND TERMINATION...................................................................17
9.1 AMENDMENT...................................................................................17
9.2 FINAL TERMINATION...........................................................................18
ARTICLE 10 MISCELLANEOUS...............................................................................18
10.1 TAXES.......................................................................................18
10.2 THIRD PERSONS...............................................................................19
10.3 NONASSIGNABILITY; NONALIENATION.............................................................19
10.4 THE PLANS...................................................................................19
10.5 APPLICABLE LAW..............................................................................19
10.6 NOTICES AND DIRECTIONS......................................................................19
10.7 SUCCESSORS AND ASSIGNS......................................................................19
10.8 GENDER AND NUMBER...........................................................................20
10.9 HEADINGS....................................................................................20
10.10 COUNTERPARTS................................................................................20
10.11 BENEFICIAL INTEREST.........................................................................20
10.12 THE TRUST AND PLANS.........................................................................20
10.13 EFFECTIVE DATE..............................................................................20
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TRUST AGREEMENT
FOR
THE J. ▇▇▇▇ GROUP, INC.
DEFERRED COMPENSATION PLAN
THIS TRUST AGREEMENT ("Trust Agreement") is made and entered into
as of January 1, 2002, between The J. ▇▇▇▇ Group, Inc. (the "Company") and
Eastern Bank & Trust Co. (the "Trustee"), to evidence the trust (the "Trust")
to be established, pursuant to The J. ▇▇▇▇ Group, Inc.
Deferred Compensation
Plan (the "Plan"), for the benefit of members of the Board of Directors of
the Company and a select group of management or highly compensated employees
who contribute materially to the continued growth, development and business
success of the Company.
ARTICLE 1
NAME, INTENTIONS, IRREVOCABILITY,
DEPOSIT AND DEFINITIONS
1.1 NAME. The name of the Trust created by this Agreement (the "Trust") shall
be:
TRUST AGREEMENT FOR
THE J. ▇▇▇▇ GROUP, INC.
DEFERRED COMPENSATION PLAN
1.2 INTENTIONS. The Company wishes to establish 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 its Insolvency (as defined below)
until paid to Participants and their Beneficiaries in such manner and at
such times as specified in the Plan. It is the intention of the parties
that this 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 supplemental 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, as amended ("ERISA"). In
addition, it is the intention of the Company to make contributions to the
Trust to provide itself with a source of funds to assist them in the
meeting of its liabilities under the Plan.
1.3 IRREVOCABILITY; CREDITOR CLAIMS. The Trust hereby established shall be
irrevocable. Except as otherwise provided in Sections 2.4 and 9.2, 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 the Participants and the general creditors of
the Company as herein set forth. The Participants and their Beneficiaries
shall have no preferred claim on, or any beneficial ownership
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interest in, any assets of the Trust. Any rights created under the Plan
and this Trust Agreement shall be mere unsecured contractual rights of the
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.
1.4 INITIAL DEPOSIT. The Company hereby deposits with the Trustee in trust one
hundred dollars ($100), which shall become the principal of the Trust to
be held, administered and disposed of by the Trustee as provided in this
Trust Agreement.
1.5 DEFINITIONS. Unless otherwise indicated herein, capitalized terms shall
have the meanings set forth in the Plan.
1.6 GRANTOR TRUST. The Trust is intended to be a "grantor trust," of which the
Company is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986,
as amended (the "Code") and the Trust shall be construed accordingly.
ARTICLE 2
GENERAL ADMINISTRATION
2.1 COMMITTEE DIRECTIONS AND ADMINISTRATION. The Committee shall direct the
Trustee as to the administration of the Trust in accordance with the
following provisions:
(a) The Committee shall be identified to the Trustee by a copy of the
resolution of the Board appointing the Committee. In the absence
thereof, the Board shall be the Committee. Persons authorized to give
directions to the Trustee on behalf of the Committee shall be
identified to the Trustee by written notice from the Committee, and
such notice shall contain specimens of the authorized signatures. The
Trustee shall be entitled to rely on such written notice as evidence
of the identity and authority of the persons appointed until a
written cancellation of the appointment, or the written appointment
of a successor, is received by the Trustee.
(b) Directions by the Committee, or its delegate, to the Trustee shall be
in writing and signed by the Committee or persons authorized by the
Committee, or may be made by such other method as is acceptable to
the Trustee.
(c) The Trustee may conclusively rely upon directions from the Committee
in taking any action with respect to this Trust Agreement, including
the making of payments from the assets held by the Trustee pursuant
to the terms of this Trust Agreement (the "Trust Fund") to
Participants, their Beneficiaries or the
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trust established under the Company's 401(k) plan (the "401(k)
Trust") and the investment of the Trust Fund pursuant to this Trust
Agreement. The Trustee shall have no liability for actions taken, or
for failure to act, on the direction of the Committee. The Trustee
shall have no liability for failure to act in the absence of proper
written directions.
(d) The Trustee may request instructions from the Committee and shall
have no duty to act or liability for failure to act if such
instructions are not forthcoming from the Committee. If requested
instructions are not received within a reasonable time, the Trustee
may, but is under no duty to, act on its own discretion to carry out
the provisions of this Trust Agreement in accordance with this Trust
Agreement and the Plan.
2.2 CONTRIBUTIONS. Except as provided in the Plan, the Company, in its sole
discretion, may at any time, or from time to time, make additional
deposits of cash or other property in trust with the Trustee to augment
the principal to be held, administered and disposed of by the Trustee as
provided in this Trust Agreement. Neither the Trustee nor any Participant
or Beneficiary shall have any right to compel such additional deposits.
The Trustee shall have no duty to collect or enforce payment to it of any
contributions or to require that any contributions be made, and shall have
no duty to compute any amount to be paid to it nor to determine whether
amounts paid comply with the terms of the Plan.
2.3 TRUST FUND. The contributions received by the Trustee from the Company
shall be held and administered pursuant to the terms of this Trust
Agreement as a single fund without distinction between income and
principal and without liability for the payment of interest thereon except
as expressly provided in this Trust Agreement. During the term of this
Trust, all income received by the Trust, net of expenses and taxes, shall
be accumulated and reinvested.
2.4 DISTRIBUTION OF EXCESS TRUST FUND TO EMPLOYERS. In the event that the
Committee determines that the Trust Fund exceeds one hundred twenty-five
percent (125%) of the anticipated benefit obligations and administrative
expenses that are to be paid under the Plan, the Trustee, at the direction
of the Committee, shall distribute to the Company such excess portion of
the Trust Fund.
ARTICLE 3
POWERS AND DUTIES OF TRUSTEE
3.1 INVESTMENT DIRECTIONS. Except as provided in this Section, the Committee
shall provide the Trustee with all investment instructions. The Trustee
shall neither affect
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nor change investments of the Trust Fund, except as directed in writing by
the Committee, and shall have no right, duty or responsibility to
recommend investments or investment changes; provided, that the Trustee
may (i) deposit cash on hand from time to time in any bank savings
account, certificate of deposit, or other instrument creating a deposit
liability for a bank, including the Trustee's own banking department, if
the Trustee is a bank, without such prior direction, (ii) invest in mutual
funds, government securities, bonds with specific ratings, or stock of
"S&P 500" companies, all within broad investment guidelines established by
the Committee from time to time, or (iii) invest in universal variable
life insurance.
3.2 MANAGEMENT OF INVESTMENTS. Subject to Section 3.1 above, the Trustee shall
have, without exclusion, all powers conferred on the Trustee by applicable
law, unless expressly provided otherwise herein, and 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 Participants or their Beneficiaries. The Trustee shall have full
power and authority to invest and reinvest the Trust Fund in any
investment permitted by law, exercising the judgment and care that persons
of prudence, discretion and intelligence would exercise under the
circumstances then prevailing, considering the probable income and safety
of their capital, including, without limiting the generality of the
foregoing, the power:
(a) To invest and reinvest the Trust Fund, together with the income
therefrom, in common stock, preferred stock, convertible preferred
stock, mutual funds, bonds, debentures, convertible debentures and
bonds, mortgages, notes, time certificates of deposit, commercial
paper and other evidences of indebtedness (including those issued by
the Trustee or any of its affiliates), other securities, policies of
life insurance, annuity contracts, options to buy or sell securities
or other assets, and other property of any kind (personal, real, or
mixed, and tangible or intangible); provided, however, that 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;
(b) To deposit or invest all or any part of the assets of the Trust Fund
in savings accounts or certificates of deposit or other deposits
which bear a reasonable interest rate in a bank, including the
commercial department of the Trustee, if such bank is supervised by
the United States or any State;
(c) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust Fund and to sell, convey,
transfer, exchange, partition, lease for any term, even extending
beyond the duration of this Trust, and
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otherwise dispose of the same from time to time in such manner, for
such consideration, and upon such terms and conditions as the Trustee
shall determine;
(d) To have, respecting securities, all the rights, powers and privileges
of an owner, including the power to give proxies, pay assessments and
other sums deemed by the Trustee to be necessary for the protection
of the Trust Fund, to vote any corporate stock either in person or by
proxy, with or without power of substitution, for any purpose; to
participate in voting trusts, pooling agreements, foreclosures,
reorganizations, consolidations, mergers and liquidations, and in
connection therewith to deposit securities with and transfer title to
any protective or other committee under such terms as the Trustee may
deem advisable; to exercise or sell stock subscriptions or conversion
rights; and, regardless of any limitation elsewhere in this
instrument relative to investment by the Trustee, to accept and
retain as an investment any securities or other property received
through the exercise of any of the foregoing powers;
(e) To hold in cash, without liability for interest, such portion of the
Trust Fund which, in its discretion, shall be reasonable under the
circumstances, pending investments, or payment of expenses, or the
distribution of benefits;
(f) To take such actions as may be necessary or desirable to protect the
Trust Fund from loss due to the default on mortgages held in the
Trust including the appointment of agents or trustees in such other
jurisdictions as may seem desirable, to transfer property to such
agents or trustees, to grant such powers as are necessary or
desirable to protect the Trust or its assets, to direct such agents
or trustees, or to delegate such power to direct, and to remove such
agents or trustees;
(g) To employ such agents including custodians and counsel as may be
reasonably necessary and to pay them reasonable compensation; to
settle, compromise or abandon all claims and demands in favor of or
against the Trust assets;
(h) To cause title to property of the Trust to be issued, held or
registered in the individual name of the Trustee, or in the name of
its nominee(s) or agents, or in such form that title will pass by
delivery;
(i) To exercise all of the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under the laws
of the State whose laws are applicable to this Trust Agreement, as
provided in Section 10.5 below,
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so that the powers conferred upon the Trustee herein shall not be in
limitation of any authority conferred by law, but shall be in
addition thereto;
(j) To borrow money from any source (including the Trustee) and to
execute promissory notes, mortgages or other obligations and to
pledge or mortgage any Trust assets as security;
(k) To lend certificates representing stocks, bonds, or other securities
to any brokerage or other firm selected by the Trustee;
(l) To institute, compromise and defend actions and proceedings; to pay
or contest any claim; to settle a claim by or against the Trustee by
compromise, arbitration, or otherwise; to release, in whole or in
part, any claim belonging to the Trust to the extent that the claim
is uncollectible;
(m) To use securities depositories or custodians and to allow such
securities as may be held by a depository or custodian to be
registered in the name of such depository or its nominee or in the
name of such custodian or its nominee;
(n) To invest the Trust Fund from time to time in one or more investment
funds, which funds shall be registered under the Investment Company
Act of 1940; and
(o) To do all other acts necessary or desirable for the proper
administration of the Trust Fund, as if the Trustee were the absolute
owner thereof.
However, nothing in this section shall be construed to mean the Trustee
assumes any responsibility for the performance of any investment made by
the Trustee in its capacity as trustee under the operation of this Trust
Agreement. Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to 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 Code.
3.3 SECURITIES. Voting or other rights in securities shall be exercised by the
person or entity responsible for directing such investments, and the
Trustee shall have no duty to exercise voting or proxy or other rights
relating to any investment managed or directed by the Committee. If any
foreign securities are purchased pursuant to the direction of the
Committee, it shall be the responsibility of the person or entity
responsible for directing such investments to advise the Trustee in
writing of any laws
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or regulations, either foreign or domestic, that apply to such foreign
securities or to the receipt of dividends or interest on such securities.
3.4 SUBSTITUTION. Notwithstanding any provision of the Plan or the Trust to
the contrary, the Company shall at all times have the power to reacquire
the Trust Fund by substituting readily marketable securities (other than
stock, a debt obligation or other security issued by the Company) and/or
cash of an equivalent value as determined by the Trustee in its sole and
absolute discretion and such other property shall, following such
substitution, constitute the Trust Fund.
3.5 DISTRIBUTIONS.
(a) The establishment of the Trust and the payment or delivery to the
Trustee of money or other property shall not vest in any Participant
or Beneficiary any right, title, or interest in and to any assets of
the Trust. To the extent that any Participant or Beneficiary acquires
the right to receive payments under any of the Plan, such right shall
be no greater than the right of an unsecured general creditor of the
Company and such Participant or Beneficiary shall have only the
unsecured promise of the Company that such payments shall be made.
(b) Concurrent with the establishment of this Trust, the Company shall
deliver to the Trustee a schedule (the "Payment Schedule") that
indicates the amounts payable in respect of each Participant (and his
or her Beneficiaries), provides a formula or formulas or other
instructions acceptable to the Trustee for determining the amounts so
payable, specifies the form in which such amount is to be paid (as
provided for or available under the Plan), and the time of
commencement for payment of such amounts. The Payment Schedule shall
be updated from time to time as is necessary. Except as otherwise
provided herein, the Trustee shall make payments to the Participants
and their Beneficiaries, or on their behalf to the 401(k) Trust, in
accordance with such Payment Schedule. The Trustee, at the direction
of the Committee, may make any distribution required to be made by it
hereunder by delivering:
(i) Its check payable to the person to whom such distribution is to
be made, to such person; or
(ii) Its check payable to an insurer for the benefit of such person,
to the insurer; or
(iii) Contracts held on the life of the Participant to whom or with
respect to whom the distribution is being made, to the
Participant or Beneficiary; or
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(iv) If a distribution is being made, in whole or in part, of other
assets, assignments or other appropriate documents or
certificates necessary to effect a transfer of title, to the
Participant or Beneficiary.
(c) 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. The Trustee shall notify the Company when principal
and earnings are not sufficient.
(d) The Company may make payment of benefits directly to Participants or
their Beneficiaries, or on their behalf to the 401(k) Trust, 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,
or on their behalf to the 401(k) Trust.
(e) Notwithstanding anything contained in this Trust Agreement to the
contrary, if at any time the Trust is finally determined by the
Internal Revenue Service not to be a "grantor trust" with the result
that the income of the Trust Fund is not treated as income of the
Company pursuant to Sections 671 through 679 of the Code or if a tax
is finally determined by the Internal Revenue Service to be payable
by one or more Participants or Beneficiaries with respect to any
interest in the Plan or the Trust Fund prior to payment of such
interest to any such Participant or Beneficiary, the Trustee shall
immediately determine each Participant's share of the Trust Fund in
accordance with the Plan, and the Trustee shall immediately
distribute such share in a lump sum to each Participant or
Beneficiary entitled thereto, regardless of whether such
Participant's employment has terminated (provided such Participant
has a vested interest in his or her accrued benefits under the Plan)
and regardless of form and time of payments specified in or pursuant
to the Plan. Any remaining assets (less any expenses or costs due
under Sections 3.7 and 3.8 of this Trust Agreement) shall then be
paid by the Trustee to the Company in such amounts, and in the manner
instructed by the Committee. If the value of the Trust Fund is less
than the benefit obligations under the Plan, the foregoing described
distributions will be limited to a Participant's share of the Trust
Fund, determined by allocating assets to the Participant based on the
ratio of the Participant's benefit obligations under the Plan to the
total benefit obligations under the Plan. The Trustee shall rely
solely on the directions of the Committee with respect to the
occurrence of the foregoing events and the resulting distributions to
be made, and the Trustee shall not be responsible for any failure to
act in the absence of such direction.
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(f) The Trustee shall make provision for the reporting and withholding of
any federal, state or local taxes that may be required to be withheld
with respect to the payment of benefits pursuant to the terms of the
Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported,
withheld and paid by the Company.
(g) Payments by the Trustee shall be delivered or mailed to addresses
supplied by the Committee and the Trustee's obligation to make such
payments shall be satisfied upon such delivery or mailing. The
Trustee shall have no obligation to determine the identity of persons
entitled to benefits or their mailing addresses.
(h) The entitlement of a Participant or his or her Beneficiaries to
benefits under the Plan shall be determined by the Company or such
party as it shall designate under the Plan, and any claim for such
benefits shall be considered and reviewed under the procedures set
out in the Plan.
3.6 TRUSTEE RESPONSIBILITY REGARDING PAYMENTS ON INSOLVENCY.
(a) The Trustee shall cease payment of benefits to Participants and their
Beneficiaries if the Company is Insolvent. The Company shall be
considered "Insolvent" for purposes of this Trust Agreement if:
(i) the Company is unable to pay its debts as they become due, or
(ii) 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 1.3 above, the principal and income of the Trust shall be
subject to claims of the general creditors of the Company under
federal and state law as set forth below:
(i) The Board and the CEO 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 the Participants or their Beneficiaries,
or on their behalf to the 401(k) Trust. The Trustee may
conclusively rely on any determination it receives from the
Board or the CEO of the Company with respect to the Insolvency
of the Company.
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(ii) 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. In this regard, the Trustee may rely upon a
letter from the Company's auditors as to the Company's
financial status.
(iii) If at any time the Trustee has determined that the Company is
Insolvent, the Trustee shall discontinue payments to the
Participants or their Beneficiaries, or on their behalf to the
401(k) Trust, 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
Participants or their Beneficiaries to pursue their rights as
general creditors of the Company with respect to benefits due
under the Plan or otherwise.
(iv) The Trustee shall resume the payment of benefits to
Participants or their Beneficiaries, or on their behalf to the
401(k) Trust, in accordance with this Article 3 of this Trust
Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to
Section 3.6(b) hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the
aggregate amount of all payments due to Participants or their
Beneficiaries, or on their behalf to the 401(k) Trust, under the
terms of the Plan for the period of such discontinuance, less the
aggregate amount of any payments made to Participants or their
Beneficiaries, or on their behalf to the 401(k) Trust, by the Company
in lieu of the payments provided for hereunder during any such period
of discontinuance. The Committee shall instruct the Trustee as to
such amounts.
3.7 COSTS OF ADMINISTRATION. The Trustee is authorized to incur reasonable
obligations in connection with the administration of the Trust, including
attorneys' fees, Administrator fees, other administrative fees and
appraisal fees, provided however, that attorneys' fees shall be as
authorized and approved by the Company. Such obligations shall be paid by
the Company. The Trustee is authorized to pay such
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amounts from the Trust Fund if the Company fails to pay them within sixty
(60) days of presentation of a statement of the amounts due.
3.8 TRUSTEE COMPENSATION AND EXPENSES. The Trustee shall be entitled to
reasonable compensation for its services as from time to time agreed upon
between the Trustee and the Company as set forth in Exhibit A, hereunder.
If the Trustee and the Company fail to agree upon a compensation, the
Trustee shall be entitled to compensation at a rate equal to the rate
charged by the Trustee for similar services rendered by it during the
current fiscal year for other trusts similar to this Trust. Subject to
Section 3.7, the Trustee shall be entitled to reimbursement for expenses
incurred by it in the performance of its duties as the Trustee, including
reasonable fees for legal counsel. The Trustee's compensation and expenses
shall be paid by the Company. The Trustee is authorized to withdraw such
amounts from the Trust Fund if the Company fail to pay them within sixty
(60) days of presentation of a statement of the amounts due.
3.9 PROFESSIONAL ADVICE. The Company specifically acknowledge that the Trustee
and/or the Administrator may find it desirable or expedient to retain
legal counsel (who may also be legal counsel for the Company generally) or
other professional advisors to advise it in connection with the exercise
of any duty under this Trust Agreement, including, but not limited to, any
matter relating to or following the Insolvency of the Company. The Trustee
and/or Administrator shall be fully protected in acting upon the advice of
such legal counsel or advisors.
3.10 PAYMENT ON COURT ORDER. To the extent permitted by law, the Trustee is
authorized to make any payments directed by court order in any action in
which the Trustee has been named as a party. The Trustee is not obligated
to defend actions in which the Trustee is named, but shall notify the
Company or Committee of any such action and may tender defense of the
action to the Company, Committee, Participant or Beneficiary whose
interest is affected. Subject to Section 3.7, the Trustee may in its
discretion defend any action in which the Trustee is named, and any
expenses incurred by the Trustee shall be paid by the Company. The Trustee
is authorized to pay such amounts from the Trust Fund if the Company fails
to pay them within sixty (60) days of presentation of a statement of the
amounts due.
3.11 PROTECTIVE PROVISIONS. Notwithstanding any other provision contained in
this Trust Agreement to the contrary, the Trustee shall have no obligation
to (i) determine the existence of any conversion, redemption, exchange,
subscription or other right relating to any securities purchased of which
notice was given prior to the purchase of such securities and shall have
no obligation to exercise any such right unless the Trustee is advised in
writing by the Committee both of the existence of the right and the
desired
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exercise thereof within a reasonable time prior to the expiration of the
right to exercise, or (ii) advance any funds to the Trust. Furthermore,
the Trustee is not a party to the Plan.
3.12 INDEMNIFICATIONS.
(a) The Company shall indemnify and hold the Trustee harmless from and
against all loss or liability (including expenses and reasonable
attorneys' fees) to which it may be subject by reason of its
execution of its duties under this Trust, or by reason of any acts
taken in good faith in accordance with any directions, or acts
omitted in good faith due to absence of directions, from the Company,
the Committee or a Participant, unless such loss or liability is due
to the Trustee's gross negligence or willful misconduct. The
indemnity described herein shall be provided by the Company.
(b) In the event that the Trustee is named as a defendant in a lawsuit or
proceeding involving one or more of the Plan or the Trust Fund, the
Trustee shall be entitled to receive on a current basis the indemnity
payments provided for in this Section, provided however that if the
final judgment entered in the lawsuit or proceeding holds that the
Trustee is guilty of gross negligence or willful misconduct with
respect to the Trust Fund, the Trustee shall be required to refund
the indemnity payments that it has received.
(c) The Company shall indemnify and hold the Administrator harmless from
and against all loss or liability (including expenses and reasonable
attorneys' fees) to which it may be subject by reason of its
execution of its duties under this Trust, or by reason of any acts
taken in good faith in accordance with any directions, or acts
omitted in good faith due to absence of directions, from the Company,
the Committee or a Participant, unless such loss or liability is due
to the Administrator's gross negligence or willful misconduct. The
indemnity described herein shall be provided by the Company.
(d) In the event that the Administrator is named as a defendant in a
lawsuit or proceeding involving the Plan or the Trust Fund, the
Administrator shall be entitled to receive on a current basis the
indemnity payments provided for in this Section, provided however
that if the final judgment entered in the lawsuit or proceeding holds
that the Administrator is guilty of gross negligence or willful
misconduct with respect to its duties under the Plan or the Trust,
the Administrator shall be required to refund the indemnity payments
that it has received.
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(e) All releases and indemnities provided in this Trust Agreement shall
survive the termination of this Trust Agreement.
ARTICLE 4
INSURANCE CONTRACTS
4.1 TYPES OF CONTRACTS. To the extent that the Trustee is directed by the
Committee to invest part or all of the Trust Fund in insurance contracts,
the type and amount thereof shall be specified by the Committee. The
Trustee shall be under no duty to make inquiry as to the propriety of the
type or amount so specified.
4.2 OWNERSHIP. Each insurance contract issued shall provide that the Trustee
shall be the owner thereof with the power to exercise all rights,
privileges, options and elections granted by or permitted under such
contract or under the rules of the insurer. The exercise by the Trustee of
any incidents of ownership under any contract shall be subject to the
direction of the Committee.
4.3 RESTRICTIONS ON TRUSTEE'S RIGHTS. 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. Despite the foregoing, the Trustee may if
directed (i) loan to the Company the proceeds of any borrowing against an
insurance policy held in the Trust Fund or (ii) assign all, or any
portion, of a policy to the Company if under other provisions of this
Trust Agreement the Company is entitled to receive assets from the Trust.
4.4 TRUSTEE'S DUTIES. The Trustee shall have no duty or obligation with
respect to any insurance policy held by the Trust except the safekeeping
of the policy, until, in accordance with directions received by the
Trustee from the Committee, (i) the policy becomes due and payable upon
the death of the insured to the Trust, as beneficiary under the policy,
and the proceeds thereof become distributable from the Trust, or (ii) the
policy is terminated or there is a withdrawal or loan from the policy or
the policy is distributed in kind. The Trustee shall have not
responsibility for the validity of any insurance policy held by the Trust,
nor shall the Trustee be liable for the performance or financial strength
of any insurance company issuing any such policy. The Trustee shall assume
no responsibility for the ongoing performance or performance rating of any
insurance policy held by the Trust or any insurance company issuing any
such policy.
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ARTICLE 5
TRUSTEE'S ACCOUNTS
5.1 RECORDS. The Trustee shall maintain accurate records and detailed accounts
of all investments, receipts, disbursements and other transactions
hereunder. Such records shall be available at all reasonable times for
inspection by the Company or its authorized representative. The Trustee,
at the direction of the Committee, shall submit to the Committee and to
any insurer such valuations, reports or other information as the Committee
may reasonably require and, in the absence of fraud or bad faith, the
valuation of the Trust Fund by the Trustee shall be conclusive.
5.2 ANNUAL ACCOUNTING; FINAL ACCOUNTING.
(a) Within sixty (60) days following the end of each Plan Year and within
sixty (60) days after the removal or resignation of the Trustee or
the termination of the Trust, the Trustee shall file with the
Committee a written account setting forth a description of all
properties purchased and sold, all receipts, disbursements and other
transactions effected by it during the Plan Year or, in the case of
removal, resignation or termination, since the close of the previous
Plan Year, and listing the properties held in the Trust Fund as of
the last day of the Plan Year or other period and indicating their
values. Such values shall be either cost or market as directed by the
Committee in accordance with the terms of the Plan.
(b) The Committee may approve such account either by written notice of
approval delivered to the Trustee or by its failure to express
written objection to such account delivered to the Trustee within
sixty (60) days after the date of which such account was delivered to
the Committee.
(c) The approval by the Committee of an accounting shall be binding as to
all matters embraced in such accounting on all parties to this Trust
Agreement and on all Participants and Beneficiaries, to the same
extent as if such accounting had been settled by a judgment or decree
of a court of competent jurisdiction in which the Trustee, the
Committee, the Company and all persons having or claiming any
interest in the Plan or the Trust Fund were made parties.
(d) Despite the foregoing, nothing contained in this Trust Agreement
shall deprive the Trustee of the right to have an accounting
judicially settled, if the Trustee, in the Trustee's sole discretion,
desires such a settlement.
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5.3 VALUATION. The assets of the Trust Fund shall be valued at their
respective fair market values on the date of valuation, as determined by
the Trustee based upon such sources of information as it may deem
reliable, including, but not limited to, stock market quotations,
statistical valuation services, newspapers of general circulation,
financial publications, advice from investment counselors, brokerage firms
or insurance companies, or any combination of sources. The Committee shall
instruct the Trustee as to the value of assets for which market values are
not readily obtainable by the Trustee. If the Committee fails to provide
such values, the Trustee may take whatever action it deems reasonable,
including employment of attorneys, appraisers, life insurance companies or
other professionals, the expense of which shall be an expense of
administration of the Trust Fund and payable by the Company. The Trustee
may rely upon information from the Company, the Committee, appraisers or
other sources and shall not incur any liability for an inaccurate
valuation based in good faith upon such information.
5.4 DELEGATION OF DUTIES. The Company or the Committee, or both, may at any
time employ the Trustee as their agent to perform any act, keep any
records or accounts and make any computations that are required of the
Company or the Committee by this Trust Agreement or the Plan. The Trustee
may be compensated for such employment and such employment shall not be
deemed to be contrary to the Trust. Nothing done by the Trustee as such
agent shall change or increase its responsibility or liability as Trustee
hereunder.
ARTICLE 6
RESIGNATION OR REMOVAL OF TRUSTEE
6.1 RESIGNATION; REMOVAL. The Trustee may resign at any time by written notice
to the Company, which shall be effective sixty (60) days after receipt of
such notice unless the Company and the Trustee agree otherwise. The
Trustee may be removed by the Company on sixty (60) days notice or upon
shorter notice accepted by the Trustee.
6.2 SUCCESSOR TRUSTEE. If the Trustee resigns or is removed, a successor shall
be appointed by the Company, in accordance with this Section, by the
effective date of the resignation or removal under Section 6.1 above. The
successor shall be a bank, trust company, or similar independent third
party that is granted corporate trustee powers under state law. If no such
appointment has been made, the Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All
expenses of the Trustee in connection with the proceeding shall be allowed
as administrative expenses of the Trust.
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6.3 SETTLEMENT OF ACCOUNTS. 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 ninety (90) days after receipt of notice of resignation, removal or
transfer, unless the Company extends the time limit. Upon the transfer of
the assets, the successor Trustee shall succeed to all of the powers and
duties given to the Trustee in this Trust Agreement. The resigning or
removed Trustee shall render to the Committee an account in the form and
manner and at the time prescribed in Section 5.2. The approval of such
accounting and discharge of the Trustee shall be as provided in such
Section.
ARTICLE 7
CONTROVERSIES, LEGAL ACTIONS AND COUNSEL
7.1 CONTROVERSY. If any controversy arises with respect to the Trust, the
Trustee shall take action as directed by the Committee or, in the absence
of such direction, as it deems advisable, whether by legal proceedings,
compromise or otherwise. The Trustee may retain the funds or property
involved without liability pending settlement of the controversy. The
Trustee shall be under no obligation to take any legal action of whatever
nature unless there shall be sufficient property in the Trust to indemnify
the Trustee with respect to any expenses or losses to which it may be
subjected.
7.2 JOINDER OF PARTIES. In any action or other judicial proceedings affecting
the Trust, it shall be necessary to join as parties the Trustee, the
Committee and the Company. No Participant or other person shall be
entitled to any notice or service of process. Any judgment entered in such
a proceeding or action shall be binding on all persons claiming under the
Trust. Nothing in this Trust Agreement shall be construed as to deprive a
Participant or Beneficiary of his or her right to seek adjudication of his
or her rights by administrative process or by a court of competent
jurisdiction.
7.3 EMPLOYMENT OF COUNSEL. The Trustee may consult with legal counsel (who may
be counsel for the Company) and shall be fully protected with respect to
any action taken or omitted by it in good faith pursuant to the advice of
counsel.
ARTICLE 8
INSURERS
8.1 INSURER NOT A PARTY. No insurer shall be deemed to be a party to the Trust
and an insurer's obligations shall be measured and determined solely by
the terms of contracts and other agreements executed by it.
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8.2 AUTHORITY OF TRUSTEE. An insurer shall accept the signature of the Trustee
to any documents or papers executed in connection with such contracts. The
signature of the Trustee shall be conclusive proof to the insurer that the
person on whose life an application is being made is eligible to have a
contract issued on his or her life and is eligible for a contract of the
type and amount requested.
8.3 CONTRACT OWNERSHIP. An insurer shall deal with the Trustee as the sole and
absolute owner of any insurance contracts and shall have no obligation to
inquire whether any action or failure to act on the part of the Trustee is
in accordance with or authorized by the terms of the Plan or this Trust
Agreement.
8.4 LIMITATION OF LIABILITY. An insurer shall be fully discharged from any and
all liability for any action taken or any amount paid in accordance with
the direction of the Trustee and shall have no obligation to see to the
proper application of the amounts so paid. An insurer shall have no
liability for the operation of the Trust or the Plan, whether or not in
accordance with their terms and provisions.
8.5 CHANGE OF TRUSTEE. An insurer shall be fully discharged from any and all
liability for dealing with a party or parties indicated on its records to
be the Trustee until such time as it shall receive at its home office
written notice of the appointment and qualification of a successor
Trustee.
ARTICLE 9
AMENDMENT AND TERMINATION
9.1 AMENDMENT. Subject to the limitations set forth in this Section 9.1, this
Trust Agreement may be amended by a written instrument executed by the
Trustee and the Company. Notwithstanding the foregoing, no such amendment
shall conflict with the terms of the Plan or shall make the Trust
revocable after it has become irrevocable in accordance with Section 1.3
above. Any amendment, change or modification shall be subject to the
following rules:
(a) GENERAL RULE. Subject to Sections 9.1(b), (c) and (d) below, this
Trust Agreement may be amended:
(i) By the Company and the Trustee, provided, however, that if an
amendment would in any way adversely affect the rights accrued
under the Plan in the Trust Fund by any Participant or
Beneficiary, each and every Participant and Beneficiary whose
rights in the Trust Fund would be adversely affected must
consent to the amendment before this Trust Agreement may be so
amended; and
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(ii) By the Company and the Trustee as may be necessary to comply
with laws which would otherwise render the Trust void, voidable
or invalid in whole or in part.
(b) LIMITATION. Notwithstanding that an amendment may be permissible
under Section 9.1(a) above, this Trust Agreement shall not be amended
by an amendment that would:
(i) Cause any of the assets of the Trust to be used for or diverted
to purposes other than for the exclusive benefit of
Participants and Beneficiaries as set forth in the Plan, except
as is required to satisfy the claims of the Company's general
creditors; or
(ii) Be inconsistent with the terms of the Plan, including the terms
of the Plan regarding termination, amendment or modification of
the Plan.
(c) WRITING AND CONSENT. Any amendment to this Trust Agreement shall be
set forth in writing and signed by the Company and the Trustee and,
if consent of any Participant or Beneficiary is required under
Section 9.1(a), the Participant or Beneficiary whose consent is
required. Any amendment may be current, retroactive or prospective,
in each case as provided therein.
(d) THE COMPANY AND TRUSTEE. In connection with the exercise of the
rights under this Section 9.1, the Trustee shall have no
responsibility to determine whether any proposed amendment complies
with the terms and conditions set forth in Sections 9.1(a) and (b)
above and may conclusively rely on the directions of the Committee
with respect thereto.
(e) TAXATION. This Trust Agreement shall not be amended, altered, changed
or modified in a manner that would cause the Participants and/or
Beneficiaries under the Plan to be taxed on the benefits under the
Plan in a year other than the year of actual receipt of benefits.
9.2 FINAL TERMINATION. The Trust shall not terminate until the date on which
Participants and their Beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan, and on such date the Trust shall
terminate. Upon termination of the Trust, any assets remaining in the
Trust shall be returned to the Company. Such remaining assets shall be
paid by the Trustee to the Company in such amounts and in the manner
instructed by the Company, whereupon the Trustee shall be released and
discharged from all obligations hereunder. From and after the date of
termination and until final distribution of the Trust Fund, the Trustee
shall continue to have all of the
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powers provided herein as are necessary or expedient for the orderly
liquidation and distribution of the Trust Fund.
ARTICLE 10
MISCELLANEOUS
10.1 TAXES. The Company shall from time to time pay taxes of any and all kinds
whatsoever that at any time are lawfully levied or assessed upon or become
payable in respect of the Trust Fund, the income or any property forming a
part thereof, or any security transaction pertaining thereto. To the
extent that any taxes lawfully levied or assessed upon the Trust Fund are
not paid by the Company, the Trustee shall have the power to pay such
taxes out of the Trust Fund and shall seek reimbursement from the Company.
Prior to making any payment, the Trustee may require such releases or
other documents from any lawful taxing authority as it shall deem
necessary. The Trustee shall contest the validity of taxes in any manner
deemed appropriate by the Company or its counsel, but at the Company's
expense, and only if it has received an indemnity bond or other security
satisfactory to it to pay any such expenses. The Trustee (i) shall not be
liable for any nonpayment of tax when it distributes an interest hereunder
on directions from the Committee, and (ii) shall have no obligation to
prepare or file any tax return on behalf of the Trust Fund, any such
return being the sole responsibility of the Committee. The Trustee shall
cooperate with the Committee in connection with the preparation and filing
of any such return.
10.2 THIRD PERSONS. All persons dealing with the Trustee are released from
inquiring into the decisions or authority of the Trustee and from seeing
to the application of any moneys, securities or other property paid or
delivered to the Trustee.
10.3 NONASSIGNABILITY; NONALIENATION. Benefits payable to 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.
10.4 THE PLAN. The Trust and the Plan are parts of a single, integrated
employee benefit plan system and shall be construed together. In the event
of any conflict between the terms of this Trust Agreement and the
agreement that constitutes the Plan, such conflict shall be resolved in
favor of this Trust Agreement.
10.5 APPLICABLE LAW. Except to the extent, if any, preempted by ERISA, this
Trust Agreement shall be governed by and construed in accordance with the
internal laws of
Massachusetts. Any provision of this Trust Agreement
prohibited by law shall be
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ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof.
10.6 NOTICES AND DIRECTIONS. Whenever a notice or direction is given by the
Committee to the Trustee, it shall be in the form required by Section 2.1.
Actions by the Company shall be by the Board or a duly authorized officer,
with such actions certified to the Trustee by an appropriately certified
copy of the action taken. The Trustee shall be protected in acting upon
any such notice, resolution, order, certificate or other communication
believed by it to be genuine and to have been signed by the proper party
or parties.
10.7 SUCCESSORS AND ASSIGNS. This Trust Agreement shall be binding upon and
inure to the benefit of the Company and the Trustee and their respective
successors and assigns.
10.8 GENDER AND NUMBER. Words used in the masculine shall apply to the feminine
where applicable, and when the context requires, the plural shall be read
as the singular and the singular as the plural.
10.9 HEADINGS. Headings in this Trust Agreement are inserted for convenience of
reference only and any conflict between such headings and the text shall
be resolved in favor of the text.
10.10 COUNTERPARTS. This Trust Agreement may be executed in an original and any
number of counterparts, each of which shall be deemed to be an original of
one and the same instrument.
10.11 BENEFICIAL INTEREST. The Company is the true beneficiary hereunder in that
the payment of benefits, directly or indirectly to or for a Participant or
Beneficiary by the Trustee, is in satisfaction of the Company's liability
therefore under the Plan. Nothing in this Trust Agreement shall establish
any beneficial interest in any person other than the Company.
10.12 THE TRUST AND PLAN. This Trust, the Plan and each Participant's Plan
Agreement are part of and constitute a single, integrated employee benefit
plan and trust, shall be construed together as the entire agreement
between the Company, the Trustee, the Participants and the Beneficiaries
with regard to the subject matter thereof, and shall supersede all
previous negotiations, agreements and commitments with respect thereto.
10.13 EFFECTIVE DATE. The effective date of this Trust Agreement shall be
January 1, 2002.
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IN WITNESS WHEREOF the Company and the Trustee have signed this Trust
Agreement as of the date first written above.
TRUSTEE: THE COMPANY:
Eastern Bank & Trust Co. The J. ▇▇▇▇ Group, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President Title: VP Finance, Corporate Controller
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