EXHIBIT 4.4
Trust Document for the Plan
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TRUST AGREEMENT
by and between
MECHANICS SAVINGS BANK
and
THE BANK OF NEW YORK
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TABLE OF CONTENTS
Page
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SECTION 1 - GENERAL......................................................... 1
1.1 Definitions................................................... 1
1.2 Compliance With Law........................................... 2
SECTION 2 - ESTABLISHMENT OF TRUST.......................................... 2
2.1 Appointment and Acceptance of Trustee......................... 2
2.2 Trustee Responsibilities...................................... 3
2.3 Contribution.................................................. 3
2.4 Exclusive Benefit............................................. 3
2.5 Return of Contributions....................................... 3
2.6 Distributions................................................. 4
SECTION 3 - AUTHORITIES..................................................... 5
3.1 Authorized Parties............................................ 5
3.2 Authorized Instructions....................................... 5
SECTION 4 - INVESTMENT AND ADMINISTRATION OF THE FUND....................... 5
4.1 Investment Funds.............................................. 5
4.2 Discretionary Powers and Duties of Trustee.................... 6
4.3 Directed Powers of Trustee.................................... 8
4.4 Employer Stock............................................... 10
4.5 Standard of Care............................................. 12
4.6 Force Majeure................................................ 12
SECTION 5 - APPOINTMENT AND AUTHORITY OF PENTEGRA.......................... 12
5.1 Appointment and Delegation................................... 12
5.2 Allocation and Investment Directions to Trustee.............. 12
5.3 Custody of Participant Loan Documents........................ 13
5.4 Designation for Authorized Instructions...................... 13
5.5 Resignation or Removal of Pentegra........................... 13
SECTION 6 - REPORTING AND RECORDKEEPING.................................... 13
6.1 Records and Accounts......................................... 13
6.2 Non-Fund Assets.............................................. 14
SECTION 7 - COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION................. 14
7.1 Compensation and Expenses.................................... 14
7.2 Tax Obligations.............................................. 15
7.3 Indemnification.............................................. 15
SECTION 8 - AMENDMENT, TERMINATION, RESIGNATION, REMOVAL................... 16
8.1 Amendment.................................................... 16
8.2 Removal or Resignation of Trustee............................ 16
8.3 Property Not Transferred..................................... ▇▇
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▇▇▇▇▇▇▇ ▇ - ADDITIONAL PROVISIONS.......................................... 17
9.1 No Merger, Consolidation or Transfer of Plan
Assets or Liabilities.................................... 17
9.2 Assignment or Alienation..................................... 17
9.3 Successors and Assigns....................................... 17
9.4 Governing Law................................................ 17
9.5 Necessary Parties............................................ 17
9.6 No Third Party Beneficiaries................................. 18
9.7 Execution in Counterparts.................................... 18
9.8 No Additional Rights......................................... 18
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TRUST AGREEMENT
THIS TRUST AGREEMENT, effective as of July 1, 1999 by and between MECHANICS
SAVINGS BANK (the "Company") and THE BANK OF NEW YORK (the "Trustee").
W I T N E S S E T H:
WHEREAS, pursuant to an Adoption Agreement, the Company has adopted a
qualified retirement plan for the benefit of its employees and the employees of
certain of the Company's affiliates which have heretofore or may hereafter adopt
such plan (such plan, as amended from time to time, is referred to herein as the
"Plan");
WHEREAS, the Company has established or desires to establish a trust
constituting a part of the Plan, pursuant to which assets will be held to
provide for the funding of, and payment of benefits under, the Plan (the
"Trust");
WHEREAS, the Company desires to appoint the Trustee as trustee of the Trust
and the Trustee is willing to accept such appointment; and
WHEREAS, the Plan provides for one or more fiduciaries named in the Plan
having the power to manage and control the assets of the Plan (the "Named
Fiduciary");
NOW, THEREFORE, the Company and the Trustee, each intending to be legally
bound, agree as follows:
SECTION 1
GENERAL
1.1 Definitions . The terms used herein shall have the following meanings:
(a) "Agreement" means this instrument, including all amendments thereto.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Employer" means the Company and any affiliate of the Company which has
heretofore adopted, or may hereafter adopt,
the Plan. Each affiliate of the Company adopting the Plan appoints the Company
as its agent for purposes of this Agreement and agrees that it shall be bound by
the decisions, actions and directions of the Company and the Named Fiduciary
under this Agreement and that the Trustee shall be fully protected in relying
upon such decisions, actions and directions and shall in no event be required to
give notice to or otherwise deal with such affiliate except by dealing with the
Company as agent of such affiliate.
(d) "Employer Stock" shall mean securities of the Employer which constitute
"qualifying employer securities" with respect to the Plan within the meaning of
Section 407 of ERISA.
(e) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
(f) "Fund" means the assets held pursuant to this Agreement as such assets
shall exist from time to time.
(g) "Tax Obligations" means the responsibility for payment of taxes,
withholding, certification and reporting requirements, claims for exemptions or
refund, interest, penalties and other related expenses of the Fund.
1.2 Compliance With Law . The Plan and Trust are intended to comply with
ERISA and to be tax-exempt under Section 501(a) of the Code. The Company assumes
full responsibility to establish and maintain the Plan as a plan meeting the
qualification requirements of Section 401(a) of the Code and shall immediately
notify the Trustee if the Plan ceases to be qualified.
SECTION 2
ESTABLISHMENT OF TRUST
2.1 Appointment and Acceptance of Trustee. The Company hereby appoints THE
BANK OF NEW YORK as Trustee of the Trust with respect to the Fund. The Company
shall provide to Trustee a resolution of its Board of Directors (which may
include a resolution authorizing one or more officers authorized to act on its
behalf) certified by the Secretary or any Assistant Secretary of the Company
("Certified Resolutions") appointing The Bank of New York as Trustee hereunder.
The Fund shall consist of all monies and other property acceptable to the
Trustee in its sole discretion as may be paid or delivered to the Trustee from
time to time, together with any and all increments thereto, proceeds and
reinvestments thereof, and income thereon, less payments and distributions
therefrom. The Fund shall be held by the Trustee in trust and dealt with in
accordance with the provisions of this Agreement without distinction between
principal and income. The Trustee hereby accepts its appointment
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as trustee, acknowledges that it assumes the duties established by this
Agreement and agrees to be bound by the terms contained herein.
2.2 Trustee Responsibilities. The Trustee shall hold the assets of, and
collect the income and make payments from the Fund, all as hereinafter provided.
Except to the extent that assets of the Fund have been deposited in a collective
investment fund maintained by the Trustee, the Trustee shall not be responsible,
directly or indirectly, for the investment or reinvestment of the assets of the
Fund, which shall be the sole responsibility of the Named Fiduciary. The Trustee
is not a party to, and has no duties or responsibilities under, the Plan other
than those that may be expressly contained in this Agreement. As to the
responsibilities of the Trustee, in any case in which a provision of this
Agreement conflicts with any provision in the Plan, this Agreement shall
control. The Trustee shall have no duties, responsibilities or liability with
respect to the acts or omissions of any prior trustee.
2.3 Contributions. The Trustee shall have no authority or duty to determine
the adequacy of or enforce the collection of contributions under the Plan, shall
not be responsible for the adequacy of the Trust to meet and discharge any
liabilities under the Plan and shall have no responsibility for any property
until such cash or property is received and accepted by the Trustee. The
Employer and the Named Fiduciary shall have the sole duty and responsibility for
ensuring the adequacy of the Trust to discharge the liabilities under the Plan,
determining the adequacy of the contributions to be made under the Plan,
transmitting the contributions to the Trustee and ensuring compliance with any
statute, regulation or rule applicable to contributions.
2.4 Exclusive Benefit. Except as may be permitted by law or by the terms of
the Plan or this Agreement, at no time prior to the satisfaction of all
liabilities with respect to participants and their beneficiaries under the Plan
shall any part of the Trust be used for or diverted to any purpose other than
for the exclusive benefit of the participants and their beneficiaries. The
assets of the Trust shall be held for the exclusive purposes of providing
benefits to participants of the Plan and their beneficiaries and defraying the
reasonable expenses of administering the Plan and the Trust.
2.5 Return of Contributions. Notwithstanding any other provision of this
Agreement: (i) if a contribution is conditioned upon a favorable determination
as to the qualified status of the Plan under Code Section 401 and the Plan
receives an adverse determination with respect to its initial qualification,
then any such contribution may be returned to the Employer within one year after
the date of determination; (ii) a contribution made by the Employer based upon
mistake of fact may be returned to the Employer within one year after the date
of
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such contribution; and (iii) if a contribution to the Plan is conditioned upon
its deductibility under the Code and a deduction for such a contribution is
disallowed, such contribution may be returned to the Employer within one year
after the date of the disallowance of such deduction.
In the case of the return of a contribution due to mistake of fact or the
disallowance of a deduction, the amount which may be returned is the excess of
the amount contributed over the amount that would have been contributed had
there not been a mistake or disallowance. Earnings attributable to the excess
contributions may not be returned to the Employer but losses attributable
thereto must reduce the amount to be so returned. Any return of contribution
made by the Trustee pursuant to this Section shall be made only upon the
direction of the Named Fiduciary, which shall have exclusive responsibility for
determining whether the conditions of such return have been satisfied and for
the amount to be returned.
2.6 Distributions. The Trustee shall make distributions and payments out of
the Fund as directed by the Named Fiduciary and amounts distributed or paid
pursuant to such direction thereafter no longer shall constitute a part of the
Fund. The Named Fiduciary may direct such distributions and payments to be made
to any person, including the Named Fiduciary or an Employer, or to any paying
agent designated by the Named Fiduciary, in such amounts and in such form
(including, without limitation, shares of Employer Stock) and for such purposes
as the Named Fiduciary shall direct. Any such order shall constitute a
certification that the payment is one the Named Fiduciary is authorized to
direct. The Named Fiduciary shall have the exclusive responsibility, and the
Trustee shall not have any responsibility or duty under this Agreement, for
ensuring that any payment made from the Fund at the direction of the Named
Fiduciary does not constitute a diversion of the assets of the Fund and for
determining that any such distribution is in accordance with the terms of the
Plan and applicable law, including, without limitation, determining the amount,
timing or method of payment and the identity of each person to whom such
payments shall be made. The Trustee shall have no responsibility or duty to
determine the tax effect of any payment or to see to the application of any
payment. The Trustee shall not be required to make any payment from the Fund in
excess of the net realizable value of the assets of the Fund or to make any
payment in cash unless there is sufficient cash in the Fund or the Named
Fiduciary has provided written instructions as to the assets to be converted to
cash for the purpose of making the distribution. If a dispute arises as to who
is entitled to or should receive any benefit or payment, the Trustee may
withhold or cause to be withheld such payment until the dispute is resolved.
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SECTION 3
AUTHORITIES
3.1 Authorized Parties. The Company shall identify the Named Fiduciary to
the Trustee and shall furnish the Trustee with a written list of the names,
signatures and extent of authority of all persons authorized to direct the
Trustee and otherwise act on behalf of the Company under the terms of this
Agreement. The Named Fiduciary will provide the Trustee with a written list of
the names, signatures and extent of authority of all persons authorized to act
on behalf of the Named Fiduciary. The Trustee shall be entitled to rely on and
shall be fully protected in acting upon direction from an authorized party until
notified in writing by the Company or the Named Fiduciary, as appropriate, of a
change of the identity of an authorized party.
3.2 Authorized Instructions. All directions and instructions to the Trustee
from a party who has been authorized to act on behalf of the Company or the
Named Fiduciary pursuant to Section 3.1 or from Pentegra (as provided for in
Section 5.4) shall be in writing, transmitted by mail or by facsimile or shall
be an electronic transmission, provided the Trustee may, in its discretion,
accept oral directions and instructions and may require confirmation in writing
of any such oral directions and instructions. The Trustee shall be entitled to
rely on and shall be fully protected in acting in accordance with all such
directions and instructions which the Trustee reasonably believes to have been
given by a party who has been authorized to act on behalf of the Company or the
Named Fiduciary pursuant to Section 3.1 or by Pentegra (pursuant to Section 5.4)
and in failing to act in the absence thereof.
SECTION 4
INVESTMENT AND ADMINISTRATION OF THE FUND
4.1 Investment Funds. The Named Fiduciary, from time to time and in
accordance with the provisions of the Plan, shall direct the Trustee to
establish one or more separate investment accounts under the Trust (each such
separate account hereinafter referred to as an "Investment Fund"). The Trustee
shall transfer to each such Investment Fund such portion of the assets of the
Fund as the Named Fiduciary directs. The assets which have been allocated to an
Investment Fund shall be invested and reinvested in accordance with the
instructions of the Named Fiduciary, which shall have exclusive responsibility
therefor. The Trustee shall be under no duty to question, and shall not incur
any liability on account of following, the instructions of the Named Fiduciary,
with respect to any Investment Fund or the investment or reinvestment of any
assets of the Fund or any Investment Fund, nor to make suggestions to the Named
Fiduciary in connection therewith or to determine the compliance of such
instructions
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with the Plan or applicable law, including, without limitation, the requirements
of Sections 406 and 407 of ERISA. The Trustee shall not be liable for any
losses, costs or expenses (including, without limitation, any opportunity costs)
resulting from any investment directions given or omitted by the named Fiduciary
and the Trustee shall not be liable for any losses, cost or expenses associated
with the investment decisions of the Named Fiduciary, including, without
limitation, any losses, costs or expenses associated with the selection of
investments by the Named Fiduciary, actual investments directed by the Named
Fiduciary and the market risks associated with such selections and directions.
If the Trustee is directed to deliver property against payment, the Trustee
shall have no liability for non-receipt of such payment.
Unless the Trustee is otherwise directed by the Named Fiduciary, all
interest, dividends and other income received with respect to, and all proceeds
received from the sale or other disposition of, assets of an Investment Fund
shall be credited to and reinvested in such Investment Fund, and all expenses of
the Fund which are properly allocable to a particular Investment Fund shall be
so allocated and charged. Subject to the provisions of the Plan, the Named
Fiduciary may direct the Trustee to eliminate an Investment Fund or Funds, and
the Trustee thereupon shall dispose of the assets of such Investment Fund or
Funds and reinvest the proceeds thereof in accordance with the instructions of
the Named Fiduciary.
4.2 Discretionary Powers and Duties of Trustee. Subject to the provisions
and limitations contained elsewhere herein, in administering the Trust, the
Trustee shall be specifically authorized in its sole administrative discretion
to:
(a) Appoint subtrustees or depositories, domestic or foreign (including
affiliates of the Trustee), as to part or all of the Fund, except that the
indicia of ownership of any asset of the Fund shall not be held outside the
jurisdiction of the district courts of the United States unless in compliance
with Section 404(b) of ERISA and regulations thereunder;
(b) Appoint one or more individuals or corporations as a custodian of any
property of the Fund and, as part of its reimbursable expenses under this
Agreement, to pay the reasonable compensation and expenses of any such
custodian;
(c) Hold property in nominee name, in bearer form, or in book entry form,
in a clearinghouse corporation or in a depository (including an affiliate of the
Trustee), so long as the Trustee's records clearly indicate that the assets held
are a part of the Fund;
(d) Collect income payable to and distributions due to the Fund and sign on
behalf of the Trust any declarations, affidavits, certificates of ownership and
other documents
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required to collect income and principal payments, including but not limited to,
tax reclamations, rebates and other withheld amounts;
(e) Collect proceeds from securities, certificates of deposit or other
investments which may mature or be called and surrender such securities at
maturity or when called; provided, however, that the Trustee shall not be liable
for failure to surrender any security for redemption prior to maturity or take
other action if notice of such redemption or other action was not provided to
the Trustee by the issuer, the Named Fiduciary or one of the nationally
recognized bond or corporate action services to which the Master Trustee
subscribes;
(f) Exchange securities in temporary form for securities in definitive
form, and to effect an exchange of shares where the par value of stock is
changed;
(g) Submit or cause to be submitted to the Named Fiduciary, on a best
efforts basis, all information received by the Trustee regarding ownership
rights pertaining to property held in the Fund;
(h) Attend to involuntary corporate actions;
(i) Determine, or cause to be determined, the fair market value of the Fund
daily, or for such other period as may be mutually agreed upon, in accordance
with methods consistently followed and uniformly applied;
(j) Render periodic statements for property held hereunder;
(k) Commence or defend suits or legal proceedings and represent the Fund in
all suits or legal proceedings in any court or before any other body or tribunal
as the Trustee shall deem necessary to protect the Fund (provided, however, that
the Trustee shall have no obligation to take any legal action for the benefit of
the Fund unless it shall first be indemnified for all expenses in connection
therewith, including without limitation counsel fees);
(l) Employ suitable agents and legal counsel, who may be counsel for an
Employer, and, as a part of its reimbursable expenses under this Agreement, to
pay their reasonable compensation and expenses. The Trustee shall be entitled to
rely on and may act upon advice of counsel on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such advice;
(m) Subject to the requirements of applicable law, take all action
necessary to settle authorized transactions;
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(n) Form corporations and create trusts under the laws of any state for the
purpose of acquiring and holding title to any securities or other property, all
on such terms and conditions as the Trustee deems advisable;
(o) Make, execute and deliver any and all documents, agreements or other
instruments in writing as are necessary or desirable for the accomplishment of
any of the powers and duties in this Agreement; and
(p) Generally take all action, whether or not expressly authorized, which
the Trustee may deem necessary or desirable for the fulfillment of its duties
hereunder.
4.3 Directed Powers of Trustee. In addition to the powers enumerated in
Section 4.2, the Trustee shall have the following powers and authority in the
administration of the Fund to be exercised solely as directed by the Named
Fiduciary:
(a) Invest and reinvest in any securities or other property including
Employer Stock, provided that in no case without the consent of the Trustee will
the assets of the Fund be invested in assets other than Employer Stock or units
of collective investment funds;
(b) Settle purchases and sales and engage in other transactions, including
free receipts and deliveries, exchanges and other voluntary corporate actions,
with respect to securities or other property received by the Trustee;
(c) Redeem, transfer or exchange securities of the Fund; sell, exchange,
convey, transfer or otherwise dispose of any other property of the Fund; and
make, execute and deliver to the purchasers thereof good and sufficient legal
documents of conveyance therefor, and all assignments, transfers and other legal
instruments, either necessary or convenient for passing the title and ownership
of such securities and other property, and no person dealing with the Trustee
shall be bound to see to the application of the purchase money or to inquire
into the validity, expediency or propriety of any such sale or disposition;
(d) Deliver notices, prospectuses and proxy statements to the Named
Fiduciary, and, subject to Section 4.4, vote in person or by proxy with respect
to any securities held by the Trust Fund in accordance with the written
directions of the Named Fiduciary; and in accordance with such power, exercise
subscription, conversion and other rights and options and make payments
incidental thereto and take action or refrain from taking any action with
respect to any reorganization, consolidation, merger, dissolution or other
recapitalization or refinancing and pay any assessments or charges in connection
therewith and delegate discretionary powers with respect thereto; but the
Company understands that, where options, tenders or other
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rights have fixed expiration dates, in order for the Trustee to act, it must
receive instructions at its offices, addressed as the Trustee may from time to
time request, by no later than noon (N.Y. City time) at least one business day
prior to the last scheduled date to act with respect thereto (or such earlier
date or time as the Trustee may direct);
(e) Hold any part of the Fund in cash or cash balances and the Trustee
shall not be responsible for the payment of interest on such balances;
(f) Make loans from the Fund to participants in the Plan, which shall be
secured by the participants account balance; however, the Named Fiduciary shall
have full and exclusive responsibility for loans made to participants,
including, without limitation, full and exclusive responsibility for the
following: development of procedures and documentation for such loans;
acceptance of loan applications; approval of loan applications; disclosure of
interest rate information required by Regulation Z of the Federal Reserve Board
promulgated pursuant to the Truth in Lending Act, 15 U.S.C. ss. 1601 et seq.;
ensuring that such loans shall bear a reasonable rate of interest (within the
meaning of Regulation ss. 2550.408(b)(1) promulgated by the Department of
Labor); acting as agent of the Trustee for the physical custody and safekeeping
of the promissory notes and other loan documents; performing necessary and
appropriate recordkeeping and accounting functions with respect to loan
transactions; enforcement of promissory note terms, including, but not limited
to, directing the Trustee to take specified actions to enforce its rights under
the documents relating to plan loans, including, without limitation, the
occurrence of events of default and maintenance of accounts and records
regarding interest and principal payments on notes. The Trustee shall not in any
way be responsible for holding or reviewing such documents, records and
procedures and shall be entitled to rely upon such information as is provided by
the Named Fiduciary or its own sub-agent or recordkeeper without any requirement
or responsibility to inquire as to the completeness or accuracy thereof, but may
from time to time examine such documents, records and procedures as it deems
appropriate. Unless otherwise instructed in writing by the Named Fiduciary, the
Trustee shall have no duty or responsibility to file a UCC-1 form or take other
action in order to perfect its security interest in the accounts of a
Participant to whom a loan is made. The Company shall indemnify and hold the
Trustee and its directors, officers and employees harmless from all claims,
liabilities, losses, damages, costs and expenses, including reasonable
attorneys' fees, arising out of any action or inaction of the Named Fiduciary
with respect to its agency responsibilities described herein with respect to
participant loans and this indemnification shall survive the termination of this
Agreement;
(g) Execute proxies for any securities held in the Fund;
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(h) Deposit cash in interest bearing accounts in the banking department of
the Trustee, the Company (provided that the Company meets the requirements of
ss. 408(b)(4) of ERISA) or in affiliated banking organization of the Trustee or
the Company;
(i) Compromise, compound, settle or arbitrate any claim, debt or obligation
due to or from the Trustee and to reduce the rate of interest on, extend or
otherwise modify, or to foreclose upon default or otherwise enforce any such
obligation; and to abandon any property determined by the Named Fiduciary to be
worthless;
(j) Invest in any collective investment fund, including any collective
investment fund maintained by the Trustee or an affiliate. The Trustee shall
have no responsibility for the custody or safekeeping of assets transferred to
any collective investment trust not maintained by the Trustee. To the extent
that any investment is made in any such collective investment fund, the terms of
the collective trust indenture shall solely govern the investment duties,
responsibilities and powers of the trustee of such collective investment fund
and, to the extent required by law or by such indenture, such terms,
responsibilities and powers shall be incorporated herein by reference and shall
be a part of this Agreement. For purposes of valuation, the value of the
interest maintained by the Fund in any such collective investment fund shall be
the fair market value of the collective investment fund units held, determined
in accordance with generally recognized valuation procedures. The Company
expressly understands and agrees that any such collective investment fund may
provide for the lending of its securities by the collective investment fund
trustee and that such collective investment fund trustee will receive
compensation from the borrowers for the lending of securities that is separate
from any compensation of the Trustee hereunder, or any compensation of the
collective investment fund trustee for the management of such fund; and
(k) For the purposes of the Fund, to borrow money from any person or
persons, including The Bank of New York, to issue the Fund's promissory note or
notes therefor, and to secure the repayment thereof by pledging, mortgaging or
otherwise encumbering any property in its possession.
4.4 Employer Stock.
(a) The Named Fiduciary may direct that all or a portion of the Fund or any
Investment Fund be invested in Employer Stock and the Trustee shall act in
accordance with any such directions. Except as otherwise required under ERISA,
the Trustee shall have no discretionary authority or responsibility to exercise
voting rights, or rights in the event of a tender offer, with respect to such
Employer Stock but instead shall be subject to the directions of the Named
Fiduciary in the exercise of such rights.
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To the extent that the Plan provides for the voting or tendering of
Employer Securities by Plan participants, the Named Fiduciary shall not
improperly interfere in any manner regarding the decisions by or directions of
any participant with respect to the vote of or response to a tender offer for
Employer Securities allocated to the participant's account, and the Named
Fiduciary shall arrange for such voting or participant's decision regarding the
participant's action with respect to an offer to take place on a confidential
basis. The Named Fiduciary will adequately communicate or cause to be
communicated to all participants the provisions of the Plan and this Agreement
relating to the right of participants with respect to Employer Stock under the
Plan. The Company will provide the Named Fiduciary with such information and
assistance as the Named Fiduciary may reasonably request, in connection with any
communications or distributions to participants.
The Company will distribute or cause to be distributed to participants
entitled to direct the Named Fiduciary with respect to Employer Stock, all
materials and communications which it provides to other stockholders of the
Company in connection with such vote. The Trustee may rely on the Company for
such distribution and will not be liable for the Company's failure to provide
such materials and communications to any such participant.
(b) In the event that the Trustee is directed to dispose of any Employer
Stock under circumstances which, in the opinion of the Trustee, require
registration of such securities under the Securities Act of 1933 and/or
qualification of such securities under the Blue Sky laws of any state or states,
then the Company, at its own expense, will promptly take or cause to be taken
any and all action necessary or appropriate to effect such registration and/or
qualification. In such event, the Trustee shall not be required to dispose of
such securities until such registration and/or qualification are complete and
effective, and the Trustee shall not be liable for any loss or depreciation of
the Fund resulting from any delay attributable thereto. The Company will
indemnify and hold the Trustee and its officers, directors and employees
harmless with respect to any claim, liability, loss, damage or expense (except
any such claims, liabilities, losses, damages or expenses that are attributable
to the Trustee's own gross negligence, bad faith or willful misconduct with
respect to any duties specifically undertaken herein) incurred as a result of
such registration or qualification or as a result of any information in
connection therewith furnished by the Company or as a result of any failure by
the Company to furnish any such information. This indemnification shall survive
termination of this Agreement. Unless otherwise directed by the Named Fiduciary,
any proceeds received by the Trustee as a result of the sale, exchange or
transfer of Employer Stock pursuant to a tender offer shall be reinvested in
Employer Stock by the Trustee if such security is available for purchase.
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4.5 Standard of Care. The Trustee shall discharge its duties under this
Agreement with the care and skill required under ERISA with respect to its
duties. The Trustee shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, direction, instruction, consent, certification or
other instrument believed by it to be genuine and delivered by the proper party
or parties. The duties of the Trustee shall only be those specifically
undertaken pursuant to this Agreement or by separate written agreement.
4.6 Force Majeure. The Trustee shall not be responsible or liable for any
losses to the Fund resulting from nationalization, expropriation, devaluation,
seizure, or similar action by any governmental authority, de facto or de jure;
or enactment, promulgation, imposition or enforcement by any such governmental
authority of currency restrictions, exchange controls, levies or other charges
affecting the Fund's property; or acts of war, terrorism, insurrection or
revolution; or acts of God; or any other similar event beyond the control of the
Trustee or its agents. This Section shall survive the termination of this
Agreement.
SECTION 5
APPOINTMENT AND AUTHORITY OF PENTEGRA
5.1 Appointment and Delegation. The Company hereby certifies to the Trustee
that Pentegra Services, Inc. ("Pentegra") is the third party administrator
appointed by the Named Fiduciary or the Company to receive, cumulate and
communicate investment and distribution directions of the participants and
beneficiaries of the Plan with respect to the Fund or the Investment Funds, and
the Named Fiduciary has delegated such responsibility and authority exclusively
to Pentegra. For purposes of this Agreement, Pentegra shall be a delegee of the
Named Fiduciary in accordance with Section 405(c)(1)(B) of ERISA. Except as
provided in Section 5.5, the Trustee shall act solely on the directions and
instructions communicated to the Trustee by Pentegra and the Trustee shall not
be liable for any failure to act on any direction or instruction of any other
party.
5.2 Allocation and Investment Directions to Trustee . Pentegra shall direct
the Trustee with respect to the allocation of assets to the Investment Funds,
transfers among the Investment Funds and investment and reinvestment of the
assets of the Fund and each Investment Fund. The Trustee shall have no duty to
invest, and shall not be liable for any interest on, any such assets it holds
uninvested pending receipt of directions from Pentegra to invest or reinvest
assets of the Fund.
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5.3 Custody of Participant Loan Documents. Pentegra is further authorized
and is hereby appointed by the Named Fiduciary and the Company to act as
custodian for the Trustee of all original promissory notes and security
agreements which shall be held subject to the order of the Trustee. In the event
that such custodianship is terminated by Pentegra, the Named Fiduciary or the
Trustee, the Named Fiduciary shall retain the originals of all promissory notes
and security agreements as custodian for the Trustee.
5.4 Designation for Authorized Instructions. Pentegra shall furnish the
Trustee with a written list of the names, signatures and extent of authority of
all persons authorized to act on behalf of Pentegra. The Trustee shall be
entitled to rely on and shall be fully protected in acting upon direction
reasonably believed by it to be from an authorized party (or omitting to act in
the absence of direction) until notified in writing by Pentegra, of a change in
the identity of an authorized party. Directions of an authorized party shall be
governed by Section 3.2 of this Agreement.
5.5 Resignation or Removal of Pentegra. In the event Pentegra resigns or is
removed as third party administrator under the Plan, or Pentegra's authority is
circumscribed in any manner, the Company shall promptly notify the Trustee of
such resignation, removal or circumscription of authority and shall furnish the
Trustee with Certified Resolutions identifying the Named Fiduciary and any other
persons authorized to assume the duties and responsibilities of Pentegra with
respect to the Plan. The Trustee shall not have or be deemed to have any
responsibility to assume the functions and duties of Pentegra, shall have no
duty or responsibility to invest or reinvest the assets of the Fund and shall
not be liable for any losses to the Fund (including any opportunity costs) as a
result of its failure to act prior to receiving the foregoing Certified
Resolution.
SECTION 6
REPORTING AND RECORDKEEPING
6.1 Records and Accounts. The Trustee shall keep full and accurate records
of all receipts, investments, disbursements, and other transactions hereunder,
including such specific records as may be agreed upon in writing between the
Company and the Trustee. Within ninety (90) days after the end of each fiscal
year of the Trust or within ninety (90) days after its removal or resignation or
the termination of this Agreement, the Trustee shall file with the Company a
written account of the administration of the Fund showing all transactions
effected by the Trustee and all property held by the Fund at its fair market
value for the accounting period. If, within ninety (90) days after the Trustee
mails such account to the Company, the Company has not given the Trustee written
notice of any exception or
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objection thereto, the statement shall be deemed to have been approved, and in
such case, the Trustee shall not be liable for any matters in such statements.
Upon prior written notice, the Company or its agent shall have the right at its
own expense to inspect the Trustee's books and records directly relating to the
Fund during normal business hours. If for any reason the Trustee fails to file
an account required of the Trustee within the applicable times specified
hereunder, such account shall be filed by the Trustee after the expiration of
such time as soon as is reasonably practicable. To the extent that the Trustee
shall be required to value the assets of the Fund, the Trustee may rely for all
purposes of this Agreement upon any certified appraisal or other form of
valuation submitted by the Named Fiduciary, Pentegra, any investment manager or
other third party appointed by the Named Fiduciary. Nothing in this Section
shall impair Trustee's right to judicial settlement of any account rendered by
it. In any such proceeding the only necessary parties shall be the Trustee, the
Company and any other party whose participation is required by law, and any
judgment, decree or final order entered shall be conclusive on all persons
having an interest in the trust.
The fiscal year of the Trust shall be the plan year as established under
the terms of the Plan.
6.2 Non-Fund Assets. The duties of the Trustee shall be limited to the
assets held in the Fund, and the Trustee shall have no duties with respect to
assets held by any other person including, without limitation, any other trustee
for the Plan unless otherwise agreed in writing. The Company hereby agrees that
the Trustee shall not serve as, and shall not be deemed to be, a co-trustee
under any circumstances. The Named Fiduciary may request the Trustee to perform
a recordkeeping service with respect to property held by others and not
otherwise subject to the terms of this Agreement. To the extent the Trustee
shall agree to perform this service, its sole responsibility shall be to
accurately reflect information on its books which it has received from the Named
Fiduciary.
SECTION 7
COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION
7.1 Compensation and Expenses. The Trustee shall be entitled to
compensation for services under this Agreement as mutually agreed by the Company
and the Trustee. The Trustee shall also be entitled to reimbursement for
reasonable expenses incurred by it in the discharge of its duties under this
Agreement. The Trustee is authorized to charge and collect from the Fund any and
all such fees and expenses to the extent such fees and expenses are not paid
directly by the Company, another Employer or by Pentegra (acting on behalf of
the Company or such other Employer).
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All amounts (including taxes) paid from the Fund which are allocable to an
Investment Fund shall be charged to such Investment Fund in accordance with
Section 4.1 of this Agreement. All such expenses which are not so allocable
shall be charged against each of the Investment Funds in the same proportion as
the value of the total assets held in such Investment Fund bears to the value of
the total assets in the Fund.
To the extent the Trustee advances funds to the Fund for disbursements or
to effect the settlement of purchase transactions, the Trustee shall be entitled
to collect from the Fund an amount equal to what would have been earned on the
sums advanced (an amount approximating the "federal funds" interest rate).
7.2 Tax Obligations. To the extent that the Company or Named Fiduciary has
provided necessary information to the Trustee, the Trustee shall use reasonable
efforts to assist the Company or the Named Fiduciary with respect to any Tax
Obligations. The Company or Named Fiduciary shall notify the Trustee of any Tax
Obligations. Notwithstanding the foregoing, the Trustee shall have no
responsibility or liability for any Tax Obligations now or hereafter imposed on
any Employer or the Fund by any taxing authorities, domestic or foreign, except
as provided by applicable law.
To the extent the Trustee is responsible under any applicable law for any
Tax Obligation, the Company or the Named Fiduciary shall inform the Trustee of
all Tax Obligations, shall direct the Trustee with respect to the performance of
such Tax Obligations, and shall provide the Trustee with all information
required by the Trustee to meet such Tax Obligations. All such Tax Obligations
shall be paid from the Fund unless paid by the Company or another Employer.
7.3 Indemnification. The Company shall indemnify and hold harmless the
Trustee and its directors, officers and employees from all claims, liabilities,
losses, damages and expenses, including reasonable attorneys' fees and expenses,
incurred by the Trustee in connection with this Agreement, except those
resulting from the Trustee's gross negligence, bad faith or willful misconduct.
This indemnification (as well as any other indemnification in this Agreement)
shall survive the termination of this Agreement. If the Trustee is acting as a
successor trustee or succeeds to responsibilities hereunder for trusteeship of
plan assets with respect to the Fund (or any portion thereof), the Company
hereby agrees to hold the Trustee harmless from and against any tax, claim,
liability, loss, damage or expense incurred by or assessed against it as such
successor as a direct or indirect result of any act or omission of a predecessor
trustee or any other person charged under any agreement affecting Fund assets
with investment responsibility with respect to such assets, except for such
taxes, claims, liabilities, losses,
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damages or expenses attributable to the Trustee's own gross negligence, bad
faith or willful misconduct.
SECTION 8
AMENDMENT, TERMINATION, RESIGNATION, REMOVAL
8.1 Amendment. This Agreement may be amended by written agreement signed by
the Company and the Trustee. This Agreement may be terminated at any time by the
Company by written instrument delivered to the Trustee. Thereafter, the Trustee
shall distribute all assets of the Fund, less any fees and expenses payable from
the Fund with respect to the Plan, pursuant to instructions of the Named
Fiduciary. The Trustee may condition its delivery, transfer or distribution of
any assets upon the Trustee's receiving assurances reasonably satisfactory to it
that the approval of appropriate governmental or other authorities has been
secured and that all notices and other procedures required by applicable law
have been complied with. The Trustee shall be entitled to assume that such
distributions are in full compliance with and not in violation of the terms of
the Plan or any applicable law.
8.2 Removal or Resignation of Trustee. The Trustee may be removed with
respect to all or part of the Fund upon receipt of sixty (60) days' written
notice (unless a shorter or longer period is agreed upon) from the Company. The
Trustee may resign as Trustee hereunder upon sixty (60) days' written notice
(unless a shorter or longer period is agreed upon) delivered to the Company. In
the event of such removal or resignation, a successor trustee will be appointed
and the retiring Trustee shall transfer the Fund, less such amounts as may be
reasonable and necessary to cover its compensation and expenses. In the event
the Company fails to appoint a successor trustee within sixty (60) days of
receipt of written notice of resignation, the Trustee reserves the right to seek
the appointment of a successor trustee from a court of competent jurisdiction.
The Trustee shall have no duties, responsibilities or liability with respect to
the acts or omissions of any successor trustee.
8.3 Property Not Transferred. The Trustee reserves the right to retain such
property as is not suitable for distribution or transfer at the time of the
termination of a Plan or this Agreement and shall hold such property for the
benefit of those persons or other entities entitled to such property until such
time as the Trustee is able to make distribution. Upon the appointment and
acceptance of a successor trustee, the Trustee's sole duties shall be those of a
custodian with respect to any property not transferred to the successor trustee.
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SECTION 9
ADDITIONAL PROVISIONS
9.1 No Merger, Consolidation or Transfer of Plan Assets or Liabilities.
Notwithstanding anything to the contrary contained herein, no merger,
consolidation or transfer of the assets or liabilities of the Plan with or to
any other plan shall be permitted, except in compliance with the provisions of
ERISA and the Code which are applicable to such mergers, consolidations or
transfers, including, without limitation, Sections 208 and 4043(b)(8) of ERISA
and Sections 401(a)(12), 414(l) and 6058(b) of the Code, and the regulations
thereunder.
9.2 Assignment or Alienation. Except as may be required by law or permitted
by the Plan, the Fund shall not be subject to any form of attachment,
garnishment, sequestration or other actions of collection afforded creditors of
the Employer, participants or beneficiaries under the Plan. The Trustee shall
not recognize any permitted assignment or alienation of benefits unless directed
to do so by the Named Fiduciary or required to do so by applicable law.
9.3 Successors and Assigns. Neither the Company nor the Trustee may assign
this Agreement without the prior written consent of the other, except that the
Trustee may assign its rights and delegate its duties hereunder to any
corporation or entity which directly or indirectly is controlled by, or is under
common control with, the Trustee. This Agreement shall be binding upon, and
inure to the benefit of, the Company and the Trustee and their respective
successors and permitted assigns. Any entity which shall by merger,
consolidation, purchase, or otherwise, succeed to substantially all the trust
business of the Trustee shall, upon such succession and without any appointment
or other action by the Company, be and become successor trustee hereunder, upon
notification to the Company.
9.4 Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York (without giving effect to conflict
of law principles thereof) to the extent not preempted by Federal law.
9.5 Necessary Parties. The Trustee reserves the right to seek a judicial or
administrative determination as to its proper course of action under this
Agreement. Nothing contained herein will be construed or interpreted to deny the
Trustee or the Company the right to have the Trustee's account judicially
determined. To the extent permitted by law, only the Trustee and the Company
shall be necessary parties in any application to the courts for an
interpretation of this Agreement or for an accounting by the Trustee, and no
participant or beneficiary under the Plan or other person having an interest in
the Fund shall be entitled to any notice or service of process. Any final
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judgment entered in such an action or proceeding shall, to the extent permitted
by law, be conclusive upon all persons.
9.6 No Third Party Beneficiaries. The provisions of this Agreement are
intended to benefit only the parties hereto, their respective successors and
assigns, and participants and their beneficiaries under the Plan. There are no
other third party beneficiaries.
9.7 Execution in Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, and said
counterparts shall constitute but one and the same instrument and may be
sufficiently evidenced by one counterpart.
9.8 No Additional Rights. Neither the establishment of the Fund nor this
Agreement shall be considered as giving any Plan participant or any other person
any legal or equitable rights against the Employer, the Named Fiduciary, the
Trustee or the assets, whether corpus or income, of the Fund unless such right
is specifically provided for in this Agreement or the Plan, nor shall it be
considered as giving any Plan participant or other employee of the Employer the
right to continue in the service of the Employer in any capacity.
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