EXHIBIT 10.23
MASTER TRUST AGREEMENT FOR CHARTER ONE FINANCIAL, INC
DEFERRED COMPENSATION PLANS
TABLE OF CONTENTS
ARTICLE 1
Name, Intentions, Irrevocability,
Deposit and Definitions -5-
1.1 Name. -5-
1.2 Intentions. -5-
1.3 Irrevocability; Creditor Claims. -6-
1.4 Initial Deposit. -6-
1.5 Additional Definitions. -6-
1.6 Grantor Trust. -8-
ARTICLE 2
General Administration -8-
2.1 Committee Directions and Administration Before Change
in Control. -8-
2.2 Administration Upon Change in Control; Determination Whether
Change In Control Has Occurred. -9-
2.3 Contributions. -9-
2.4 Trust Fund. -10-
2.5 Distribution of Excess Trust Fund to Employers. -10-
ARTICLE 3
Powers and Duties of Trustee -10-
3.1 Investment Directions. -10-
3.2 Investment Upon Change in Control. -10-
3.3 Management of Investments. -10-
3.4 Voting -13-
3.5 Substitution. -14-
3.6 Distributions. -14-
3.7 Trustee Responsibility Regarding Payments on Insolvency. -17-
3.8 Costs of Administration. -19-
3.9 Trustee Compensation and Expenses. -19-
3.10 Professional Advice. -19-
3.11 Payment on Court Order. -19-
3.12 Protective Provisions. -20-
3.13 Indemnifications. -20-
2
ARTICLE 4
Insurance Contracts -20-
4.1 Types of Contracts. -20-
4.2 Ownership. -21-
4.3 Restrictions on Trustee's Rights. -21-
ARTICLE 5
Trustee's Accounts -21-
5.1 Records. -21-
5.2 Annual Accounting; Final Accounting. -21-
5.3 Valuation. -22-
5.4 Delegation of Duties. -22-
ARTICLE 6
Resignation or Removal of Trustee -22-
6.1 Resignation; Removal. -22-
6.2 Successor Trustee. -23-
6.3 Settlement of Accounts. -23-
ARTICLE 7
Controversies, Legal Actions and Counsel -23-
7.1 Controversy. -23-
7.2 Joinder of Parties. -24-
7.3 Employment of Counsel. -24-
ARTICLE 8
Insurers -24-
8.1 Insurer Not a Party. -24-
8.2 Authority of Trustee. -24-
8.3 Contract Ownership. -24-
8.4 Limitation of Liability. -25-
8.5 Change of Trustee. -25-
ARTICLE 9
9.1 Amendment and Termination -25-
9.2 Final Termination -26-
ARTICLE 10
Miscellaneous -26-
3
10.1 Directions Following Change in Control. -26-
10.2 Taxes. -27-
10.3 Third Persons. -27-
10.4 Nonassignability; Nonalienation. -27-
10.5 The Trust and Plans. -27-
10.6 Applicable Law. -27-
10.7 Notices and Directions. -28-
10.8 Successors and Assigns. -28-
10.9 Gender and Number. -28-
10.10 Headings. -28-
10.11 Counterparts. -28-
10.12 Beneficial Interest. -28-
10.13 Effective Date. -28-
4
MASTER TRUST AGREEMENT
FOR
CHARTER ONE FINANCIAL, INC.
DEFERRED COMPENSATION PLANS
THIS MASTER TRUST AGREEMENT ("Master Trust Agreement") is made and
entered into effective as of January 1, 2003, between Charter One Financial,
Inc., (the "Company"), and American Express Financial Corporation (the
"Trustee"), to evidence the master trust (the "Trust") established, pursuant to
those designated executive and director deferral plans of the Company now or
hereafter existing that require the establishment of a trust, for the benefit of
a select group of management, highly compensated employees and/or Directors who
contribute materially to the continued growth, development and business success
of the Company and those affiliates of the Company, if any, that participate in
the Plans (collectively, "Affiliates," or singularly, "Affiliate"). This Master
Trust Agreement amends and restates the Master Trust Agreement that was
effective January 1, 2002.
ARTICLE 1 Name, Intentions, Irrevocability,Deposit and Definitions
1.1 Name. The name of the Trust created by this Agreement (the "Trust") shall
be:
MASTER TRUST AGREEMENT FOR
CHARTER ONE FINANCIAL, INC. DEFERRED COMPENSATION PLANS
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 and the Affiliates' creditors in the event of their Insolvency
(as defined below) until paid to Participants and their Beneficiaries in
such manner and at such times as specified in the Plans. It is the
intention of the parties that this Trust shall constitute an unfunded
arrangement and shall not affect the status of the Plans as unfunded plans
maintained for the purpose of providing supplemental compensation for a
select group of management, highly compensated employees and/or Directors
for purposes of Title I of ERISA (as defined below). In addition, it is
the intention of the Company and the Affiliates to make contributions to
the Trust to provide themselves with a source of funds to assist them in
the meeting of their liabilities under the Plans.
The Company has represented to the Trustee that it shall restrict
participation in the nonqualified plan(s) relating to or supported by this
trust to a "select group of management or highly compensated employees,"
as that phrase is used in and defined under Sections 201, 301, and 401 of
ERISA. The Company further represents to the Trustee that this trust is
exempt from Parts 2, 3, and 4 of Title 1 of ERISA. The Company agrees to
indemnify against and hold harmless from any and all claims, judgments,
settlements and related costs or damages incurred by the Trustee resulting
from Trustee's reliance on these representations.
5
1.3 Irrevocability; Creditor Claims. The Trust hereby established shall be
irrevocable. Except as otherwise provided in Section 2.5 and 9.2, the
principal of the Trust, and any earning thereon, shall be held separate
and apart from other funds of the Company and the Affiliates and shall be
used exclusively for the uses and purposes of the participants and the
general creditors of the Company and the Affiliates as herein set forth.
The 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 Plans and this Master Trust Agreement shall be
mere unsecured contractual rights of the Participants and their
Beneficiaries against the Company and the Affiliates. Any assets held by
the Trust will be subject to the claims of the Company's and the
Affiliates' 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
$100, which shall become the principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this Master
Trust Agreement.
1.5 Additional Definitions. In addition to the definitions set forth above,
for purposes hereof, unless otherwise clearly apparent from the context,
the following terms have the following indicated meanings:
(a) "Beneficiary" shall mean one or more persons, trusts, estates or
other entities, designated in accordance with a Plan, that are
entitled to receive benefits under a Plan upon the death of a
Participant.
(b) "Board" shall mean the board of directors of the Company.
(c) "Change in Control" shall mean the first to occur of any of the
following events:
(i) Any "person" (as that term is used in Section 13 and 14(d)(2)
of the Securities Exchange Act of 1934 ("Exchange Act"))
becomes the beneficial owner (as that term is used in Section
13(d) of the Exchange Act), directly or indirectly, of 50% or
more of the Company's capital stock entitled to vote in the
election of directors;
(ii) During any period of not more than two consecutive years, not
including any period prior to the adoption of this Trust,
individuals who, at the beginning of such period constitute
the board of directors of the Company, and any new director
(other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction
described in clause (i), (iii), (iv) or (v) of this Section
1.5(c)) whose election by the board of directors or nomination
for election by the Company's stockholders was approved by a
vote of at least three-fourth (3/4ths) of the directors then
still in office, either were directors at the beginning of the
period or whose election or nomination for election was
6
previously so approved, cease for any reason to constitute at
least a majority thereof;
(iii) The shareholders of the Company approve any consolidation or
merger of the Company, other than a consolidation or merger of
the Company in which the holders of the common stock of the
Company immediately prior to the consolidation or merger hold
more than 50% of the common stock of the surviving corporation
immediately after the consolidation or merger;
(iv) The shareholders of the Company approve any plan or
proposal for the liquidation or dissolution of the Company;
or
(v) The shareholders of the Company approve the sale or transfer
of substantially all of the Company's assets to parties that
are not within a "controlled group of corporations" (as
defined in Section 1563 of the Internal Revenue Code of 1986,
as amended (the "Code")) in which the Company is a member.
(d) "Committee" shall mean the administrative committee appointed by the
Board to administer this Trust.
(e) "Director" shall mean any member of the board of directors of the
Company or any Affiliate.
(f) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
(g) "Insolvent" shall have the meaning set forth in Section 3.7(a)
below.
(h) "Insolvent Entity" shall have the meaning set forth in Section
3.7(a) below.
(i) "IRS" shall mean Internal Revenue Service.
(j) "Participant" shall mean a person who is a participant in one or
more of the Plans in accordance with their terms and conditions.
(k) "Payment Schedule" shall have the meaning set forth in Section
3.6(b) below.
(l) "Plan(s)" shall mean one or more of the designated executive and/or
director non-qualified deferral plans established now or in the
future by the Company that require or authorize the establishment of
a trust.
(m) "Plan Year" shall mean the fiscal year of the Company.
7
(n) "Post-Change Committee" shall mean the administrative committee
appointed to administer this Trust after a Change in Control. After
a Change in Control, references in this Plan to the Committee shall
be deemed to refer to the Post-Change Committee where necessary and
appropriate.
(o) "Trust Fund" shall mean the assets held by the Trustee pursuant to
the terms of this Master Trust Agreement and for the purposes of the
Plans.
1.6 Grantor Trust. The Trust is intended to be a "grantor trust," of which the
Company and the Affiliates are the grantors, within the meaning of subpart
E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue
Code of 1986, as amended, and the Trust shall be construed accordingly.
ARTICLE 2 General Administration
2.1 Committee Directions and Administration Before Change in Control. Until a
Change in Control has occurred, this Section 2.1 shall be effective and
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 Master Trust Agreement,
including the making of payments from the Trust Fund and the
investment of the Trust Fund pursuant to this Master Trust
Agreement. The Trustee shall have no liability for actions taken, or
for failure to act, on the direction of the Committee.
(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 Master Trust
Agreement in accordance with this Master Trust Agreement and the
Plans.
8
2.2 Administration Upon Change in Control; Determination Whether Change In
Control Has Occurred. In the event of a Change in Control, the authority
of the Committee to administer the Trust and direct the Trustee, as set
forth in Section 2.1 above, shall cease, and the Post-Change Committee
shall have complete authority to administer the Trust in accordance with
the terms of the Plan. The president of the Company shall notify the
Trustee in writing when a Change in Control has occurred. The Trustee has
no duty to inquire whether a Change in Control has occurred and may rely
on notification by the president of the Company of a Change in Control;
provided, however, that if any officer, former officer, director or former
director of the Company or any Affiliate (other than the president of the
Company), or any Participant notifies the Trustee that there has been or
there may be a Change in Control, the Trustee shall have the duty to
satisfy itself as to whether a Change in Control has in fact occurred. In
determining whether the Company or an Affiliate has experienced a Change
in Control, the Trustee may engage the services of legal, accounting,
financial and other advisors which may be advisors to the Company or the
Affiliate to assist it with the determination. The Company and each
Affiliate agree to cooperate fully with any reasonable inquiry of the
Trustee or such advisor in making the determination of whether a Change in
Control has occurred with respect to the Company or an Affiliate. To the
extent that the Trustee engages the services of an advisor to the Company
or the Affiliate, the Trustee may rely, without further inquiry, on the
written determination of that advisor as to whether or not a Change in
Control has occurred. All costs reasonably incurred by the Trustee in
making the determination of whether a Change in Control has occurred shall
be reimbursed to the Trustee by the Company or the Affiliate, and if not
so reimbursed shall be chargeable against the Trust. The Company and the
Affiliates shall indemnify and hold harmless the Trustee for any damages
or costs (including attorneys' fees) that may be incurred because of
reliance on the president's notice or lack thereof.
2.3 Contributions. Except as provided in any Plan, the Company and the
Affiliates, in their sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property acceptable to the
Trustee in trust with the Trustee to augment the principal to be held,
administered and disposed of by the Trustee as provided in this Master
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 Plans.
2.4 Trust Fund. The contributions received by the Trustee from the Company and
the Affiliates shall be held and administered pursuant to the terms of
this Master 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 Master Trust Agreement.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
9
2.5 Distribution of Excess Trust Fund to Employers. In the event that the
Committee, prior to a Change in Control determines that the Trust Fund
exceeds 125 % of the anticipated benefit obligations and administrative
expenses that are to be paid under the Plans, the Trustee, at the
direction of the Committee prior to a Change in Control, shall distribute
to the Company and the Affiliates such excess portion of the Trust Fund.
ARTICLE 3 Powers and Duties of Trustee
3.1 Investment Directions. Except as provided in this Section and Section 3.2
below, the Committee shall provide the Trustee with all investment
instructions. The Trustee shall neither affect nor change investments of
the Trust Fund, except as directed in writing by the Committee, and shall
have no 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, or (ii) invest in government securities, bonds with
specific ratings, or stock of "Fortune 500" companies, all within broad
investment guidelines established by the Committee from time to time.
3.2 Investment Upon Change in Control. In the event of a Change in Control,
the authority of the Committee to direct investments of the Trust Fund
shall cease and the Post-Change Committee shall have complete authority to
direct investments of the Trust Fund, and to direct the Trustees
accordingly.
3.3 Management of Investments. Subject to Section 3.1 and Section 3.2 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 if a Plan provides (and to
the extent such Plan provides) for Participant investment
direction, the Trustee shall invest and reinvest the Trust Fund
in investments (which may include common stock of the Company or
an Affiliate) at the direction of the committee at any time
prior to a Change in
10
Control on behalf of a Participant, to mirror such Participant's
investment selection as a Measurement Fund under the Plan, including
in the case of common stock of the Company or an Affiliate
reinvestment of cash dividends thereon; provided, however, that the
Trustee shall not otherwise invest in securities (including stock or
rights to acquire stock) or obligations issued by the Company or the
Affiliates, 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 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) Subject to Section 3.4, the Trustee shall deliver or cause to be
executed and delivered, to the Company, all notices,
prospectuses, finance statements proxies and proxy soliciting
materials relating to investments held hereunder. The Trustees
shall not vote any proxy or tender offer election, participate in
any voting trust, exercise any options or subscription right or
join in, dissent from or oppose any merger, reorganization,
consolidation, liquidation or sale with respect to any asset held
hereunder except in accordance with the timely written
instructions of the Company. If no such written instructions are
timely received, such proxies, elections and voting trust shall
not be voted; such options or subscription rights shall not be
exercised; and such mergers; reorganizations, consolidation,
liquidations or sales shall not be joined, dissented from or
opposed.
(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;
11
(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 invested in trustees generally
under the laws of the State whose laws are applicable to this Master
Trust Agreement, as provided in Section 10.6 below, 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.
(p) The Trustees may, in the exercise of its discretion, invest and
reinvest the assets of any trust created under this Agreement in
assets issued or distributed by American Express Financial
Corporation or any of its successors, subsidiaries or affiliates,
even though American Express Financial Corporation and its
successors, subsidiaries or affiliates are affiliated with the
Trustee. Assets that the Trustee may acquire pursuant to the
authority granted by this paragraph include, but are not limited
to load and no-load mutual funds.
(q) The Trustee shall have full discretionary authority to make
sales, purchases and exchanges of assets of any trust created
under this Agreement to, from, through any securities
broker/dealer owned by or affiliated with American Express
Financial Corporation, including but not limited to American
Express Securities Services, or any of its successors,
subsidiaries or affiliates, or any unaffiliated
12
persons, partnerships or corporations it may select, and settle
transactions in the usual course of business.
(r) The Trustee's responsibilities do not include filing with the DOL
of the Registration Statement or any other documents or any
determination of the need to register the plan or any portion of
the plan as a security, or the performance of any service related
to the plan's compliance with any requirement under the
Securities Act of 1933, the Securities Exchange Act of 1934, the
Blue Sky laws of any state or other jurisdiction, or any related
regulations, administrative rules or requirements.
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 operations of this Master Trust
Agreement. Notwithstanding any powers granted to the Trustee pursuant to this
Master 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 Internal
Revenue Code of 1986, as amended.
3.4 Voting. Each Participant with an Account under a Plan that holds Company
Stock (as defined in the Plans) shall be entitled to direct the Committee
(or the Post-Change Committee, as the case may be) as to the manner in
which such Company Stock is to be voted. Company Stock held in the Plan
Accounts for which a Participant has not given timely or proper voting
instructions shall be voted in the same proportion as the Participants who
directed the Committee (or the Post-Change Committee, as the case may be)
to vote their Company Stock with respect to such voting issue. The Trustee
shall vote the Company Stock in accordance with the directions provided to
it by the Committee (or the Post-Change Committee, as the case may be).
Securities held by the Plans other than Company Stock shall be voted by
the Trustee at the direction of the Committee (or the Post-Change
Committee, as the case may be). Other than acting upon instructions as
provided in this Section 3.4, the Trustee shall have no duty to exercise
voting or proxy or other rights relating to any investment held in the
Plans.
3.5 Substitution. Notwithstanding any provision of any Plan or the Trust to
the contrary, the Company and/or any Affiliate shall at all times have the
right at any time, and from time to time in its sole discretion, to
substitute assets of equal fair market value for any asset held by the
Trust, provided such assets are acceptable to the Trustee. This right
shall be exercisable by the Company or any Affiliate in a nonfiduciary
capacity without the approval or consent of any person in a fiduciary
capacity, except as provided in the preceding sentence.
13
3.6 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 Plans, such right shall be no greater than the right of an
unsecured general creditor of the Company and the Affiliates and
such Participant or Beneficiary shall have only the unsecured
promise of the Company and the Affiliates 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) on a Plan by Plan basis, 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 applicable Plans), 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, prior to a Change in Control, the
Trustee shall make payments to the Participants and their
Beneficiaries in accordance with such Payment Schedule. After a
Change in Control, the Trustee shall make payments in accordance
with the terms and provisions of each of the Plans and related
plan agreements. The Trustee, at the direction of the Committee
or, after a Change in Control, at the direction of the
Post-Change 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 the person, or, if prior to a Change in
Control, to the Company for redelivery to such person;
provided that before a Change in Control, the Committee may
direct the Trustee to deliver one or more lump sum checks
payable to the Company, and the Company shall prepare and
deliver individual checks for each Participant or
Beneficiary; or
(ii) If insurance is provided for under the Plan, its check payable
to an insurer for the benefit of such person, to the insurer,
or, if prior to a Change in Control, to the Company for
redelivery to the insurer; or
(iii) If insurance is provided for under the Plan, 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, if prior to a Change in Control, to the
Company for redelivery to the person to whom such distribution
is to be made; or
(iv) If, pursuant to the Plan, a distribution is being made, in
whole or in part, of other assets, assignments or other
appropriate documents or certificates
14
necessary to effect a transfer of title, to the Participant or
Beneficiary, or, if prior to a Change in Control, to the
Company for redelivery to such person.
(c) If the principal of the Trust, and any earnings thereon, are not
sufficient, determined on a Plan by Plan basis, to make payments of
benefits in accordance with the terms of the Plans, the Company and
the Affiliates shall make the balance of each such payment as it
falls due. The Trustee shall notify the Company and the Affiliates
when principal and earnings are not sufficient.
(d) The Company and the Affiliates may make payment of benefits directly
to Participants or their Beneficiaries as they become due under the
terms of the Plans. The Company and the Affiliates shall notify the
Trustee of their decisions to make payment of benefits directly
prior to the time amounts are payable to Participants or their
Beneficiaries.
(e) Notwithstanding anything contained in this Master Trust Agreement
to the contrary, if at any time the Trust is finally determined
by the IRS not be a "grantor trust" with the result that the
income of the Trust Fund is not treated as income of the Company
or the Affiliates pursuant to Sections 671 through 679 of the
Internal Revenue Code of 1986, as amended, or if a tax is finally
determined by the IRS to be payable by one or more Participants
or Beneficiaries with respect to any interest in the Plans or the
Trust Fund prior to payment of such payment of such interest to
any such Participant or Beneficiary, the Committee (or the
Post-Change Committee, as the case may be) shall immediately
determine each Participant's share of the Trust Fund in
accordance with the Plans, and the Trustee shall at the direction
of Committee (or the Post-Change Committee, as the case may be)
immediately distribute such share in a lump sum to such
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 Plans) and regardless of form and time of
payments specified in or pursuant to the Plans. Any remaining
assets (less any expenses or costs due under Sections 3.8 and 3.9
of this Master Trust Agreement) shall then be paid by the Trustee
to the Company and the Affiliates in such amounts, and in the
manner instructed by the Committee (or the Post-Change Committee,
as the case may be). If the value of the Trust Fund is less than
the benefit obligations under the Plans, 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 Plans to the total benefit obligations under the Plans.
Prior to a Change in Control, 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. After a Change in Control, the
Post-Change Committee shall assume the obligations of the
Committee described in the preceding sentence.
15
(f) The Company hereby agrees that it will accept appointment as
Trustee's agent for purposes of computing amounts to be withheld
in satisfaction of any tax withholding obligations and for
remitting any taxes withheld to the appropriate taxing
authority. The Trustee, on the instruction of the Company, shall
withhold appropriate amounts for payments made pursuant to
Section 3.6(b), and pay to the Company the amounts so withheld
for remittance to the appropriate taxing authorities. To the
extent the Company fails to direct the Trustee as to the proper
amount and character of any taxes to be withheld from any
distribution made pursuant hereto, the Trustee may withhold from
any distribution so made an amount equal to the combined federal,
state and local tax rates (as may be applicable) and remit such
amount to the Company for deposit with the appropriate taxing
authority. The Company agrees to execute any additional
documents necessary to accept appointment as Trustee's agent
pursuant to this Section 3.6(f) and to indemnify the Trustee for
any loss suffered as a result of the Company's failure to
properly remit taxes withheld on payments hereunder.
(g) Prior to a Change in Control, 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. After a Change in Control, the Post-Change
Committee shall have such obligations. The Trustee shall have no
obligation to determine the identity or persons entitled to benefits
or their mailing addresses.
(h) Prior to a Change in Control, the entitlement of a Participant or
his or her Beneficiaries to benefits under the Plans shall be
determined by the Company and the Affiliates or such party as they
shall designate under the Plans, and any claim for such benefits
shall be considered and reviewed under the procedures set out in the
Plans. After a Change in Control, the Post-Change Committee shall
have such obligations.
3.7 Trustee Responsibility Regarding Payments on Insolvency.
(a) The Trustee shall cease payment of benefits to Participants and
their Beneficiaries if the Company, or any Affiliate, is Insolvent
(the "Insolvent Entity"). The Insolvent Entity shall be considered
"Insolvent" for purposes of this Master Trust Agreement if:
(i) the Insolvent Entity is unable to pay its debts as they
become due, or
(ii) the Insolvent Entity is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(iii) The Insolvent Entity is determined to be insolvent by the
Office of Thrift Supervision or other federal banking agency
with jurisdiction to make such determination.
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For purposes of this Section 3.7, if an entity is determined to be
Insolvent, each Affiliate in which such entity has an equity interest
shall also be deemed to be an Insolvent Entity. However, the insolvency of
an Affiliate will not cause a parent corporation to be deemed Insolvent.
(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 and its
Affiliates under federal and state law as set forth below:
(i) The Board and the president of the Company shall have the
duty to inform the Trustee in writing of the Company's or
any Affiliate's Insolvency. If a person claiming to be a
creditor of the Company or any Affiliate alleges in writing
to the Trustee that the Company or any Affiliate has become
Insolvent, the Trustee shall determine whether the Company
or any Affiliate is Insolvent and, pending such
determination, the Trustee shall discontinue payment of
benefits to the Insolvent Entity's Participants or their
Beneficiaries. Prior to a Change in Control, the Trustee
may conclusively rely on any determination it receives from
the Board or the president of the Company with respect to
the Insolvency of the Company or any Affiliate.
(ii) Unless the Trustee has actual knowledge of the Company's or an
Affiliate's Insolvency, or has received notice from the
Company, an Affiliate, or a person claiming to be a creditor
alleging that the Company or an Affiliate is Insolvent, the
Trustee shall have no duty to inquire whether the Company or
any Affiliate is Insolvent. The Trustee may in all events rely
on such evidence concerning the Company's or any Affiliate'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 or any Affiliate's solvency. In this
regard, the Trustee may rely upon a letter from the Company's
or a Affiliate's auditors as to the Company's or any
Affiliate's financial status. In determining whether the
Company or an Affiliate is insolvent for purposes of this
Section 3.7, the Trustee may engage the services of legal,
accounting, financial and other advisors which may be advisors
to the Company or the Affiliate to assist it with the
determination. The Company and each Affiliate agree to
cooperate fully with any reasonable inquiry of the Trustee or
such advisor in making the determination of whether the
Company or the Affiliate is Insolvent. To the extent that the
Trustee engages the services of an advisor to the Company or
the Affiliate, the Trustee may rely, without further inquiry,
on the written determination of that advisor as to whether or
not the Company or the Affiliate is Insolvent. All costs
reasonably incurred by the Trustee in making the determination
of whether the Company or the Affiliate is Insolvent shall be
reimbursed to the Trustee
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by the Company or the Affiliate, and if not so reimbursed
shall be chargeable against the Trust.
(iii) If at any time the Trustee has determined that the Company or
any Affiliate is Insolvent, the Trustee shall discontinue
payments to the Insolvent Entity's Participants or their
Beneficiaries, and shall hold the portion of the assets of the
Trust allocable to the Insolvent Entity for the benefit of the
Insolvent Entity's general creditors. Nothing in this Master
Trust Agreement shall in any way diminish any rights of
Participants or their Beneficiaries to pursue their rights as
general creditors of the Insolvent Entity with respect to
benefits due under the Plans or otherwise.
(iv) The Trustee shall resume the payment of benefits to
Participants or their Beneficiaries in accordance with this
Article 3 of this Master Trust Agreement only after the
Trustee has determined that the alleged Insolvent Entity 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 3.7(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 under the terms of the Plans for the period of such
discontinuance, less the aggregate amount of any payments made to
Participants or their Beneficiaries by the Company or any
Affiliate in lieu of the payments provided for hereunder during
any such period of discontinuance. Prior to a Change in Control,
the Committee shall instruct the Trustee as to such amounts, and
after a Change in Control, the Post-Change Committee shall
determine such amounts in accordance with the terms and
provisions of the Plans.
3.8 Costs of Administration. The Trustee is authorized to incur
reasonable obligations in connection with the administration of the
Trust, including attorneys' fees, administrative fees and appraisal
fees. Such obligations shall be paid by the Company and the
Affiliates. The Trustee is authorized to pay such amounts from the
Trust Fund if the Company or the Affiliates fail to pay them within 60
days of presentation of a statement of the amounts due.
3.9 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. If the Trustee and the Company fail
to agree upon a compensation, or following a Change in Control, 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. 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, accounting and other professional advisors. The Trustee's
compensation and expenses shall be paid by the Company and the Affiliates.
The Trustee is authorized to withdraw such amounts from the Trust Fund if
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the Company or the Affiliates fail to pay them within 60 days of
presentation of a statement of the amounts due. The Trustee will, as part
of its compensation for services, receive the interest earned on any
uninvested cash awaiting investment into or distribution from the Trust.
3.10 Professional Advice. The Company and the Affiliates specifically
acknowledge that the Trustee may find it desirable or expedient to retain
legal counsel, accountants (who may also be legal counsel or accountants
for the Company) or other professional advisors to advise it in connection
with the exercise of any duty under this Master Trust Agreement,
including, but not limited to, any matter relating to or following a
Change in Control or the Insolvency of the Company or any Affiliate. The
Trustee shall be fully protected in acting upon the advice of such legal
counsel or advisors.
3.11 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. 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 and the Affiliates. The Trustee is authorized
to pay such amounts from the Trust Fund if the Company or the Affiliates
fail to pay them within 60 days of presentation of a statement of the
amounts due.
3.12 Protective Provisions. Notwithstanding any other provision contained in
this Master 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 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 Plans.
3.13 Indemnifications.
(a) The Company and the Affiliates 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 and the
Affiliates.
(b) In the event that the Trustee is named as a defendant in a
lawsuit or proceeding involving one or more of the Plans or the
Trust Fund, the Trustee shall be entitled
19
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) All releases and indemnities provided in this Master Trust Agreement
shall survive the termination of this Master Trust Agreement.
ARTICLE 4 Insurance Contracts
4.1 Types of Contracts. To the extent that the Trustee is directed by the
Committee prior to a Change in Control 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, prior to a Change in
Control, 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 (i)
loan to the Company or any Affiliate 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 or any Affiliate if under other
provisions of this Master Trust Agreement the Company or any Affiliate is
entitled to receive assets from the Trust.
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 and Affiliates or their 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 60 days following the end of each Plan Year and within 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
20
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 Plans.
(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 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 Master 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,
the Affiliates and all persons having or claiming any interest in
any Plan or the Trust Fund were made parties.
(d) Despite the foregoing, nothing contained in this Master 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.
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. Prior to a Change
in Control, the Committee shall instruct the Trustee as to the value of
assets for which market values are not readily obtainable by the Trustee.
After a Change in Control, the Post-Change 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 or Post-Change 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 and the
Affiliates. The Trustee may rely upon information from the Company and the
Affiliates, the Committee, the Post-Change 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, any Affiliate or the Committee by this Master Trust Agreement or
the Plans. The Trustee may be compensated for such employment and such
employment shall not be deemed to be contrary to the Trust.
21
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 60 days after receipt of such
notice unless the Company and the Trustee agree otherwise. Prior to a
Change in Control, the Trustee may be removed by the Company on 60 days
notice or upon shorter notice accepted by the Trustee. After a Change in
Control, the Trustee may be removed by a majority vote of the
Participants, and if a Participant is dead, his or her Beneficiaries (who
collectively shall have one vote among them and shall vote in place of
such deceased Participant), on 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. After the
occurrence of a Change in Control, a successor Trustee may not be
appointed without the consent of a majority of the Participants, provided,
however, that if the Company fails to designate a successor Trustee, the
majority of the participants may appoint the successor Trustee. 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.
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 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 Master 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 or after a Change in Control, 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
22
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 Trustees, the
Committee, the Company and the Affiliates. 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 Master 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 or any Affiliate) and shall be fully protected
with respect to any action taken or omitted by it in good faith pursuant
to the advise 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.
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 Plans or this Master
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 Plans, 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.
23
ARTICLE 9 Amendment and Termination
9.1 Amendment. Subject to the limitations set forth in this Section 9.1, this
Master 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 Plans 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 Section 9.1(b), (c) and (d) below, this
Master 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 Plans 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 Master Trust Agreement may be so amended; and
(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 Master 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 Plans, except as is required to
satisfy the claims of the Company's or an Affiliate's general
creditors; or
(ii) Be inconsistent with the terms of any Plan, including the terms of
any Plan regarding termination, amendment or modification of the
Plan.
(c) Writing and Consent. Any amendment to this Master 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:
(i) prior to a Change in Control, the Trustee shall have no
responsibility to determine whether any proposed amendment complies
with the terms and conditions set forth in Section 9.1(a) and (b)
above and may conclusively rely on the directions of the Committee
with respect thereto, unless the Trustee has knowledge of a proposed
transaction or transactions that would result in a Change in
Control; and
24
(ii) after a Change in Control, the power of the Company to amend this
Master Trust Agreement shall cease, and the owner to amend that was
previously held by the Company shall, instead, be exercised by
majority of the Participants and, if a Participant is dead, his or
her Beneficiaries (who collectively shall have one vote among them
and shall vote in place of such deceased Participant), with the
consent of the Post-Change Committee, provided that such amendment
otherwise complies with the requirements of Section 9.1(a), (b) and
(c) above.
(e) Taxation. This Master Trust Agreement shall not be amended, altered,
changed or modified in a manner that would cause the participants and/or
Beneficiaries under any Plan to be taxed on the benefits under any 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 Plans, 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 and the Affiliates. Such remaining
assets shall be paid by the Trustee to the Company and the Affiliates 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 power provided
herein as are necessary or expedient for the orderly liquidation and
distribution of the Trust Fund.
ARTICLE 10 Miscellaneous
10.1 Directions Following Change in Control. Despite any other provision of
this Master Trust Agreement that may be construed to the contrary,
following a Change in Control, all powers of the Committee, the Company
and the Board to direct the Trustee under this Master Trust Agreement
shall terminate, and the Trustee shall act in accordance with directions
provided to it by the Post-Change Committee to carry out the terms of this
Master Trust Agreement in accordance with the Plans and this Master Trust
Agreement.
10.2 Taxes. The Company and the Affiliates 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 assess
upon the Trust Fund are not paid by the Company and the Affiliates, the
Trustee shall at the direction of the Committee (or the Post-Change
Committee, as the case may be) pay such taxes out of the Trust Fund and
shall seek reimbursement from the Company and the Affiliates. Prior to
making any payment, the Trustee may require such releases or other
documents from any lawful taxing authority as it shall deem necessary.
25
The Trustee shall at the direction of the Committee (or the Post-Change
Committee, as the case may be) contest the validity of taxes in any manner
deemed appropriate by the Company or its counsel, but at the Company's and
the Affiliates' 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 (or the Post-Change
Committee, as the case may be), 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 (or the Post-Change
Committee, as the case may be) . The Trustee shall cooperate with the
Committee in connection with the preparation and filing of any such
return.
10.3 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.
10.4 Nonassignability; Nonalienation. Benefits payable to Participants and
their Beneficiaries under this Master 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.
10.5 The Plans and the Trust. This Trust, the Plans 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. In
the event of any conflict between the terms of this Master Trust Agreement
and the agreements that constitute the Plans such conflict shall be
resolved in favor of this Master Trust Agreement.
10.6 Applicable Law. Except to the extent, if any, preempted by ERISA, this
Master Trust Agreement shall be governed by and construed in accordance
with the internal laws of the State of Minnesota. Any provision of this
Master Trust Agreement prohibited by law shall be ineffective to the
extent of any such prohibition, without invalidating the remaining
provisions hereof.
10.7 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.
10.8 Successors and Assigns. This Master Trust Agreement shall be binding upon
and inure to the benefit of the Company, the Affiliates and the Trustee
and their respective successors and assigns.
26
10.9 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.
10.10 Headings. Headings in this Master 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.
10.11 Counterparts. This Master 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.
10.12 Beneficial Interest. The Company and the Affiliates are the true
beneficiaries 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 and the Affiliates' liability therefor under
the Plans. Nothing in this Master Trust Agreement shall establish any
beneficial interest in any person other than the Company and the
Affiliates.
10.13 Effective Date. The effective date of this Master Trust Agreement
shall be January 1, 2003.
IN WITNESS WHEREOF the Company and the Trustee have signed this Master
Trust Agreement as of the date first written above.
TRUSTEE: THE COMPANY:
American Express Financial Corporation By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------
Title: Senior Vice President
of Administrative
Services
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