Exhibit 10.25
TRUST AGREEMENT
FOR THE
RAYONIER INC.
LEGAL RESOURCES TRUST
This Agreement is made this ___ day of _______________, by and between
Rayonier Inc. (the "Company") and Wachovia Bank, N.A., a national banking
association, as trustee hereunder ("Trustee").
WHEREAS, the Company has adopted the nonqualified deferred compensation
plans and entered into the other benefits agreements (collectively, the
"Benefits Arrangements") listed on Appendix A, including the Supplemental Senior
Executive Severance Pay Plan (the "Supplemental Severance Plan"), and, for this
purpose, the right to have had deposited with the trustee under the Trust
Agreement for Rayonier Inc. Supplemental Senior Executive Plan and the Change in
Control Agreement for W. ▇▇▇ ▇▇▇▇▇▇ (the "Executive Severance Trust") amounts in
respect thereof and in respect of the Change in Control Agreement for ▇▇▇
▇▇▇▇▇▇;
WHEREAS, the Company has incurred or expects to incur liability under
the terms of the Benefits Arrangements with respect to the executives and key
employees and participating in the Benefits Arrangements and identified at any
time on Tier I and Tier II under the Supplemental Severance Plan and on Schedule
1 hereto as amended and updated from time to time (herein each, an "Executive"
and together, the "Executives");
WHEREAS, the Company wishes to establish a Legal Resources Trust
(hereinafter called this "Trust") and to contribute to it assets that shall be
held therein, subject to the claims of the Company's creditors in the event of
the Company's Insolvency, as herein defined, until paid to or for the benefit of
the Executives and their beneficiaries to pay certain litigation and similar
expenses as may be incurred in connection with the collection of any amounts due
to them under the Benefits Arrangements or the enforcement of any rights they
may have thereunder (as hereinafter defined, "Contest Payments"); and
WHEREAS, it is the intention of the Company to make contributions to
this Trust to provide itself with a source of funds to provide Contest Payments
as herein provided.
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WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of each of
the Benefits Arrangements as an unfunded arrangement maintained for the purpose
of providing deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement Income
Security Act of 1974.
NOW, THEREFORE, the parties do hereby establish this Trust and agree
that this Trust shall be comprised, held and disposed of as follows:
Section 1. Establishment of Trust.
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(a) The Company hereby deposits with Trustee in trust the amounts
listed in Appendix B, which together with the additional amounts to be deposited
as provided below, shall become the principal of this Trust to be held,
administered and disposed of by Trustee as provided in this Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) This Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the
"Code"), and shall be construed accordingly.
(d) The principal of this Trust, and any earnings thereon, shall be
held separate and apart from other funds of the Company and, subject to Section
8 below, shall be used exclusively for the uses and purposes of the Executives
and general creditors, as herein set forth. The Executives and their
beneficiaries shall have no preferred claim on, or any beneficial ownership
interest in, any assets of this Trust. Any rights created under the Benefits
Arrangements and this Agreement shall be mere unsecured contractual rights of
the Executives and their beneficiaries against the Company. Any assets held by
this Trust will be subject to the claims of the Company's general creditors
under federal and state law in the event of Insolvency, as defined in Section 5
below.
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(e) Without limiting the mandatory contribution provision of Section
2, the Company, in its sole discretion, may at any time, or from time to time,
make additional deposits of cash or other property in trust with Trustee to
augment the principal to be held, administered and disposed of by Trustee as
provided in this Agreement. Neither Trustee nor any Executive or beneficiary
shall have any right to compel such additional deposits.
(f) Of the amounts deposited with Trustee, upon a Change in Control
an amount equal to $375,000 shall be set aside as a reserve, $250,000 shall be
released upon receipt of the written notice provided for in Section 4(c) or
applied as provided therein following a Change in Control, and $125,000 of which
shall be set aside as a reserve for expenses of Trustee under Sections 10(d) and
11(a) incurred following a Change in Control.
Section 2. Additional Contributions/Addition or Removal of Executives.
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(a) Upon any addition of the name of any executive or key employee to
the Tier I or Tier II list under the Supplemental Severance Plan, the Company
shall not later than the dates provided for on Appendix B hereto, make a deposit
in trust with the Trustee an amount equal to $250,000 for each Executive, and a
like amount of $250,000 in respect of each new Executive added to Schedule 1
hereto from time to time, as soon as practicable after the identification of
such Executive but in no event later than fifteen (15) days thereafter; provided
that, if a Change in Control has not occurred, the Company may offset its
obligations by the amount, if any, previously contributed in respect of an
Executive who has died or retired and whose beneficiaries have been fully paid
all amounts to which they may become entitled under any of the Benefits
Arrangements. For all purposes of this Agreement, "Change in Control" has the
meaning specified in the Retirement Plan for Salaried Employees of Rayonier,
Inc. as amended effective July 18, 1997, and as the same may be thereafter
amended from time to time prior to the occurrence of a Change in Control. The
amounts set aside with the Trustee shall be a pool of funds to be applied as
provided for herein and shall not constitute a separate entitlement of an
Executive to any particular amount hereunder.
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(b) At any time prior to a Change in Control, the Company may remove
individuals or include additional individuals as Executives hereunder upon
written notice to Trustee together with an amended Schedule 1 incorporating, in
the case of an additional Executive, the required information in respect of such
additional Executive; provided that, removal of the name of an Executive from
the Supplemental Severance Plan shall not alone operate to remove the individual
as a participant hereunder. Subject to the provisions of Section 13(c) below,
the Company has agreed that from and after a Change in Control it shall not be
entitled to remove the name of any Executive covered hereunder prior to the time
that all amounts due in respect of such Executive under the applicable Benefits
Arrangement shall have been fully paid to such Executive or his or her
beneficiaries.
Section 3. Covered Payments.
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(a) On the effective date hereof, no less frequently than annually
thereafter, at the time of any additional contribution hereunder, and at the
time of a Change in Control, the Company shall deliver to Trustee a payment
schedule (the "Payment Schedule") that indicates the amounts payable in respect
of each Executive (and his or her beneficiaries), that provides a formula or
other instructions acceptable to Trustee for determining the amounts so payable,
the form in which such amount is to be paid (as provided for or available under
the Benefits Arrangements), and the time of commencement for payment of such
amounts.
(b) Prior to a Change in Control (and following a Change in Control,
absent obvious mistake), the entitlement of an Executive or his or her
beneficiaries to benefits under the Benefits Arrangements shall be determined by
the Company or such party as it shall designate under the Benefits Arrangements,
and, in any event, any claim for benefits shall be considered and reviewed under
the procedures set out in the Benefits Arrangements.
(c) The Company shall make payment of benefits directly to an
Executive as they become due under the terms of the Benefits Arrangements. The
Company shall notify Trustee of its payment of benefits at the time amounts are
payable to participants or their beneficiaries. Upon any such payment, the
Company shall provide Trustee with a new Payment Schedule reflecting the
payments made by the Company.
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(d) Nothing in this Agreement shall serve to relieve the obligations
of the Company to make payments under the Benefits Arrangements in respect of an
Executive prior to the time that any payment has been made to an Executive or
his or her beneficiary. The Company shall make each such payment as it falls
due.
Section 4. Payment of Legal and Related Expenses.
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(a) Company's Obligation to Pay Legal and Related Expenses. The
Company agrees to pay, to the full extent permitted by law, all legal fees and
expenses that the Executive or his or her beneficiaries may reasonably incur in
pursuing in good faith payment of any amount due to the Executive or such
beneficiaries under any Benefit Arrangement, or as a result of any contest by
the Company or others of the validity or enforceability of, or liability under,
any provision of any Benefits Arrangement or any guarantee of performance
thereof (collectively, "Contest Payments"), plus in each case such interest as
may be provided for under the applicable Benefits Arrangement but not less than
the highest applicable Federal long-term rate in effect as of the date of the
Change in Control determined as provided for in Sections 7872(f)(2)(B) and
1274(d)(1)(A) of the Internal Revenue Code of 1986, as amended, without regard
to whether or not the Executive or such beneficiaries prevail, in full or in
part, in any such matter and without regard to the duration of the delay in time
of payment.
(b) Trustee's Disbursement of Contest Payments. Provided that this
Agreement has not been earlier terminated pursuant to Section 11 hereo, the
pursuant to the Claims Procedure specified on Schedule 3 hereto, as amended from
time to time as hereinafter provided (the "Claims Procedure"), Trustee shall
advance Contest Payments on behalf of any individual up to the amount
contributed on behalf of the Executive in respect of whom the benefits under a
Benefit Arrangement are sought, up to the amount of such contribution or, if
less, up to the balance remaining in trust exclusive of reserves; provided that,
if Contest Payments are sought on behalf of three or more Executives arising
from substantially the same circumstances, the Trustee shall aggregate the
Contest Payments for the benefit of all participants hereunder. The timing and
manner of payment of Contest Payments shall be made in the sole and reasonable
discretion of the Trustee in accordance with the Claims
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Procedure. The Claims Procedures may be modified by the Company, with the
reasonable agreement of Trustee prior to a Change in Control, and may be
reasonably amended by the Trustee thereafter; provided that, no such Claims
Procedure shall be inconsistent with making the full resources in Trust
available to expedite payment of benefits to the Executives and their
beneficiaries under the Benefits Arrangements and to avoid Executives being
required to advance any amounts whatsoever for the payment of legal fees in
connection therewith. A written copy of the Claims Procedure, as it may be
amended from time to time, shall be provided to each Executive.
(c) Trustee's Written Notification Requirements. If within 15 days of
a Change in Control the Trustee has not received written notice from the trustee
under the Executive Severance Trust of the receipt by such trustee of the
amounts required to be deposited with such trustee upon a Change in Control in
respect of each Executive (other than an Executive who shall have received not
less than the full Cash Portion to which such Executive is entitled under the
Severance Arrangements, as such term is defined in the Executive Severance
Trust), together with a copy of the current payment schedule provided for under
the Executive Severance Trust, there shall be presumed to be a claim under the
Claims Procedure and the Trustee shall transfer an amount of not less than
$250,000 as a retainer to the law firm designated pursuant to the Claims
Procedure within five business days thereafter.
Section 5. Trustee Responsibility Regarding Payments to Trust
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Beneficiary When The Company Is Insolvent.
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(a) Trustee shall cease payments hereunder if the Company is
Insolvent. The Company shall be considered "Insolvent" for purposes of this
Agreement if (i) the Company is unable to pay its debts as they become due, or
(ii) the Company is subject to a pending proceeding as a debtor under the United
States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of this Trust shall be subject to
claims of general creditors of the Company under federal and state law as set
forth below.
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(1) The Board of Directors and the Chief Executive Officer of the
Company shall have the duty to inform Trustee in writing of the Company's
Insolvency. If a person claiming to be a creditor of the Company alleges in
writing to Trustee that the Company has become Insolvent, Trustee shall
determine whether the Company is Insolvent and, pending such determination,
Trustee shall discontinue payment of benefits to Executives or their
beneficiaries.
(2) Unless Trustee has actual knowledge of the Company's Insolvency,
or has received notice from the Company or a person claiming to be a creditor
alleging that the Company is Insolvent, Trustee shall have no duty to inquire
whether the Company is Insolvent. Trustee may in all events rely on such
evidence concerning the Company's solvency as may be furnished to Trustee and
that provides Trustee with a reasonable basis for making a determination
concerning the Company's solvency.
(3) If at any time Trustee has determined that the Company is
Insolvent, Trustee shall discontinue payments hereunder and shall hold the
assets of this Trust for the benefit of the Company's general creditors. Nothing
in this Agreement shall in any way diminish any rights of Executives or their
beneficiaries to pursue their rights as general creditors of the Company with
respect to benefits due under the Benefits Arrangements or otherwise.
(4) Trustee shall resume the payments in accordance with Section 4 of
this Agreement only after Trustee has determined that the Company is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues the
payment from this Trust pursuant to Section 5 hereof and subsequently resumes
such payments, the first payment following such discontinuance shall include the
aggregate amount of all payments due under the terms hereof for the period of
such discontinuance, less the aggregate amount, if any, paid directly to
Executives or their beneficiaries by the Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
Section 6. Payments to the Company.
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Except as provided in Section 5 hereof, after a Change in Control, the
Company shall have no right or power to direct Trustee to return to the Company
or to divert to others any of this Trust assets before all payment of benefits
have been made to Executives and their beneficiaries pursuant to the terms of
the Benefits Arrangements.
Section 7. Investment Authority.
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(a) In no event may Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by the Company, other than a de
minimis amount held in common investment vehicles in which Trustee invests. All
rights associated with assets of this Trust shall be exercised by Trustee or the
person designated by Trustee and shall in no event be exercisable by or rest
with the Executives.
(b) The Trustee shall invest the principal of this Trust and any earnings
thereon in such short term readily marketable investments designed to preserve
capital as chosen by the Trustee in the prudent exercise of its fiduciary duty
hereunder and in such a manner as directed by the Pension Fund Trust and
Investment Committee, and prior to a Change in Control.
(c) The Company shall have the right, at anytime, and from time to time in
its sole discretion, to substitute marketable securities of equal fair market
value for any asset held by this Trust; provided that, following a Change in
Control, such substitution of assets shall be subject to the acceptance of
Trustee.
Section 8. Disposition of Income.
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During the term of this Trust prior to a Change in Control, all
Distributable Income received by this Trust, net of expenses and taxes, shall be
distributed to the Company no less frequently than semi-annually, unless
otherwise directed by the Company, and from and after a Change in Control shall
be accumulated and reinvested. "Distributable Income" shall mean gain or income
actually realized on the amounts held in Trust but only to the extent that the
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aggegregate fair market value of the assets held in Trust following the
distribution of such amounts and payment of all expenses of this Trust paid or
accrued as of the distribution date not otherwise satisfied by the Company,
would equal or exceed the principal amounts deposited by the Company with
Trustee under Section 2(a).
Section 9. Accounting by Trustee.
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Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between the
Company and Trustee. Within 30 days following the close of each calendar year
and within 30 days after the removal or resignation of Trustee, Trustee shall
deliver to the Company a written account of its administration of this Trust
during such year or during the period from the close of the last preceding year
to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in this Trust at the end of such year or as of the date of such removal or
resignation, as the case may be.
Section 10. Responsibility of Trustee.
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(a) Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims, provided, however, that Trustee shall incur
no liability to any person for any action taken pursuant to a direction, request
or approval given by the Company which is contemplated by, and in conformity
with, the terms of the Benefits Arrangements or this Trust and is given in
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writing by the Company. In the event of a dispute between the Company and a
party, Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) The Company hereby indemnifies Trustee against losses, liabilities,
claims, costs and expenses in connection with the administration of this Trust,
unless resulting from the gross negligence or willful misconduct of Trustee. To
the extent the Company fails to make any payment on account of an indemnity
provided in this Section 10(b), in a reasonably timely manner, Trustee may
obtain payment from this Trust. If Trustee undertakes or defends any litigation
arising in connection with this Trust or to protect an Executive's or a
beneficiary's rights under the Benefits Arrangements, the Company agrees to
advance to Trustee, and to indemnify Trustee against Trustee's costs, reasonable
expenses and liabilities (including, without limitation, attorneys' fees and
expenses) relating thereto and to be primarily liable for such payments. If the
Company does not pay such costs, expenses and liabilities in a reasonably timely
manner, Trustee may obtain payment from this Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
the Company generally) with respect to any of its duties or obligations
hereunder. Following a Change in Control, Trustee may select independent legal
counsel (which can include its in-house counsel) and may consult with counsel or
other experts with respect to its duties and with respect to the rights of
Executives and their beneficiaries under the Benefits Arrangements.
(d) Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations hereunder and in good faith may rely on any
determinations made by such agents and information provided to it by the
Company.
(e) Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein.
(f) Notwithstanding any powers granted to Trustee pursuant to this
Agreement or to applicable law, 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
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301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant
to the Code.
Section 11. Compensation and Expenses of Trustee Resignation and Removal of
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Trustee.
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(a) The Company shall timely pay all administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from this Trust.
(b) Prior to a Change in Control, Trustee may resign at any time by
written notice to the Company, which shall be effective sixty (60) days after
receipt of such notice unless the Company and Trustee agree otherwise. Following
a Change in Control, Trustee may resign only after the appointment of a
successor Trustee reasonably acceptable to a majority of the Executives
hereunder. If Trustee resigns within two years after a Change in Control or if
the Company fails to act within a reasonable period of time following such
resignation, Trustee shall apply, at the expense of the Company, to a court of
competent jurisdiction for the appointment of a successor Trustee or for
instructions.
(c) Trustee may be removed by the Company on sixty (60) days notice or
upon shorter notice accepted by Trustee prior to a Change in Control. Following
a Change in Control, Trustee may only be removed by the Company with the consent
of a majority of the Executives hereunder and upon appointment of a qualified
successor Trustee hereunder reasonably acceptable to the majority of the
Executives hereunder.
(d) Upon resignation or removal of Trustee and appointment of a successor
Trustee, all assets shall subsequently be transferred to the successor Trustee.
The transfer shall be completed with sixty (60) days after receipt of acceptance
of an appointment as trustee by a successor trustee, unless the Company extends
the time limit.
(e) If Trustee resigns or is removed, a successor shall be appointed by
the Company, in accordance with Section 12 hereof, by the effective date of
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resignation or removal under this Section 11. If no such appointment has been
made, Trustee may apply to a court of competent jurisdiction for appointment of
a successor or for instructions. All
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expenses of Trustee in connection with the proceeding shall be allowed as
administrative expenses of this Trust.
(f) Any Trustee of any trust created hereunder shall be an institution
having total assets under management of at least five hundred million dollars
($500,000,000) at the time of appointment and at all times thereafter (the
"Minimum Assets Requirement"). Should Trustee cease to have total assets of at
least five hundred million dollars ($500,000,000) under management or cease to
be so selected, Trustee shall be removed and a successor Trustee appointed in
accordance with the provisions of Sections 10 and 11 hereof.
Section 12. Appointment of Successor.
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(a) If Trustee resigns or is removed in accordance with Section 11 hereof,
the Company may appoint any bank trust department or other party that may be
granted corporate trustee powers under state law who meets the Minimum Assets
Requirement, as a successor to replace Trustee upon resignation or removal (a
"Qualified Trustee"); provided that, following a Change in Control, if Trustee
resigns or is removed in accordance with Section 11 the successeor trustee shall
be reasonably acceptable to a majority of the Executives hereunder at the time.
In any such event, the appointment shall be effective when accepted in writing
by the new Trustee, who shall have all of the rights and powers of the former
Trustee, including ownership rights in this Trust . The former Trustee shall
execute any instrument necessary or reasonably requested by the Company or the
successor Trustee to evidence the transfer.
(b) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections 9 and 10 hereof. The successor Trustee shall not be responsible for and
the Company shall indemnify and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.
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(c) The Company shall provide the name of the successor Trustee to each
Executive, or if applicable, his or her beneficiaries receiving benefits at the
time of the appointment of Trustee.
(d) The Company shall execute such indemnification or other agreement with
Trustee as may be reasonably requested and customary for trustees performing
services of this kind.
Section 13. Amendment or Termination.
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(a) This Agreement may be amended by a written instrument executed by
Trustee and the Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Benefits Arrangements or shall make this Trust
revocable after it has become irrevocable in acordance with Section 1 hereof.
(b) Except as provided in Section 13(c), this Trust shall not terminate
until the date on which each Executive and their beneficiaries are no longer
entitled to benefits pursuant to the terms of the Benefits Arrangements and all
fees and expenses of this Trust have been paid.
(c) Upon written approval of all Executives and beneficiaries entitled to
payment of benefits pursuant to the terms of the Benefits Arrangements, the
Company may terminate this Trust prior to the time all benefit payments under
the Benefits Arrangements have been made.
(d) This Agreement may not be amended or terminated by the Company for two
(2) years following a Change in Control without the written consent of a
majority of the Executives then covered by this Agreement except, if in the
opinion of Review Counsel (as such term is defined in Schedule 3 hereto), such
amendment is necessary to maintain the tax status of this Trust, the deferred
compensation status of the Benefits Arrangements, or status of this Trust under
the Employee Retirement Income Security Act of 1974 as amended to this Trust.
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(e) Upon termination of this Trust any assets remaining in this Trust,
after payment of all expenses of this Trust, shall be returned to the Company.
Section 14. Miscellaneous.
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(a) Any provision of this Agreement prohibited by law shall be ineffective
to the extent of any such prohibition, without invalidating the remaining
provisions hereof.
(b) Benefits payable to any Executive and his or her beneficiaries under
this Agreement may not be anticipated, assigned (either at law or in equity),
alienated, pledged, encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of [North Carolina], to the extent not preempted by
applicable federal law.
Section 15. Effective Date.
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The effective date of this Agreement shall be the date and year first above
written.
RAYONIER INC.
By: _______________________________
▇▇▇▇ ▇. ▇'▇▇▇▇▇
Its: Senior Vice President
Administration
_______________________________
, as Trustee
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