THE FINOVA GROUP INC. BONUS KEYSOP(TM) TRUST
EFFECTIVE DATE: NOVEMBER 1, 1997
TABLE OF CONTENTS
ARTICLE PAGE
SECTION 1
ESTABLISHMENT OF TRUST...........................................2
SECTION 2
PAYMENTS TO PARTICIPANTS AND BENEFICIARIES.......................2
SECTION 3
TRUSTEE RESPONSIBILITY WHEN THE EMPLOYER IS INSOLVENT............3
SECTION 4
PAYMENTS TO THE EMPLOYER.........................................4
SECTION 5
INVESTMENT AUTHORITY.............................................4
SECTION 6
DISPOSITION OF INCOME............................................5
SECTION 7
ACCOUNTING BY THE TRUSTEE........................................5
SECTION 8
RESPONSIBILITY OF THE TRUSTEE....................................5
SECTION 9
COMPENSATION AND EXPENSES OF THE TRUSTEE.........................6
SECTION 10
RESIGNATION AND REMOVAL OF TRUSTEE...............................6
SECTION 11
APPOINTMENT OF SUCCESSOR.........................................7
SECTION 12
AMENDMENT OR TERMINATION.........................................7
SECTION 13
MISCELLANEOUS....................................................8
SECTION 14
EFFECTIVE DATE...................................................8
THE FINOVA GROUP INC. KEYSOP(TM) TRUST
PREAMBLE
THIS AGREEMENT, made this November 1, 1997 by and between The FINOVA Group Inc.
(the "Employer") and The FINOVA Group Inc. Compensation Committee (the
"Trustee");
WHEREAS, the Employer has adopted The FINOVA Group Inc. Bonus Keysop(TM)
Plan (the "Plan").
WHEREAS, the Employer has incurred or expects to incur liability under
the terms of such Plan with respect to the individuals participating in such
Plan;
WHEREAS, the Employer wishes to establish a trust (the "Trust") and to
contribute to the Trust, assets to be held therein subject to the claims of the
Employer's creditors in the event of the Employer's Insolvency, as herein
defined, until paid to the Plan Participants or their Beneficiaries in such
manner and at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded Plan for purposes of Title I of the Employee Retirement Income
Security Act of 1974, as amended;
WHEREAS, it is the intention of the Employer to make contributions to the
Trust to provide a source of funds to assist it in meeting its liabilities under
the Plan; and
NOW, THEREFORE, the parties hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
Version as of 02/27/98
SECTION 1
ESTABLISHMENT OF TRUST
(a) The Employer shall make contributions of principal to the Trust to be
held, administered and disposed of by the Trustee as provided in this Trust
Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the Employer is
the grantor, within the meaning of Subpart E, Part I, Subchapter J, Chapter 1,
Subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Employer and shall be used
exclusively for the uses and purposes of Plan Participants and general creditors
as herein set forth. The Plan Participants and their Beneficiaries shall have no
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust. Any rights created under the Plan and this Trust Agreement shall be mere
unsecured contractual rights of the Plan Participants and their Beneficiaries
against the Employer. Any assets held by the Trust will be subject to the claims
of the Employer's general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) The Employer, in its sole discretion, may at any time, or from time
to time, make additional deposits of cash or other property in trust with the
Trustee to augment the principal to be held, administered and disposed of by the
Trustee as provided in this Trust Agreement. Neither the Trustee nor any of the
Plan Participants or Beneficiaries shall have any right to compel such
additional deposits.
SECTION 2
PAYMENTS TO PARTICIPANTS AND BENEFICIARIES
(a) The Employer shall provide instructions acceptable to the Trustee for
determining the amount of Designated Property and the time for payment. Except
as otherwise provided herein, the Trustee shall make payments to the Plan
Participants and their Beneficiaries in accordance with such instructions.
(b) The Employer shall make provision for the reporting and withholding
of any federal, state or local taxes that may be required to be withheld with
respect to the payment of benefits pursuant to the terms of the Plan and shall
pay amounts withheld to the appropriate taxing authorities or determine that
such amounts have been reported, withheld and paid by the Employer.
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(c) The entitlement of a Plan Participants or their Beneficiaries to
benefits under the Plan shall be subject to the terms of the Plan, and any claim
for such benefits shall be considered and reviewed under the procedures set
forth in the Plan. Any assets of the trust not necessary to fund the future
payments to participants may be returned to the Employer.
(d) The Employer may make payment of Plan benefits directly to Plan
Participants or their Beneficiaries as they become due under the terms of the
Plan. The Employer shall notify the Trustee of its decision to make payment of
Plan benefits directly prior to the time amounts are payable to Participants or
their Beneficiaries. In addition, if the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in accordance
with the terms of the Plan, the Employer shall make the balance of each such
payment as it becomes due. The Trustee shall notify the Employer when such
principal and earnings are not sufficient for payment of benefits under the
Plan.
SECTION 3
TRUSTEE RESPONSIBILITY WHEN THE EMPLOYER IS BANKRUPT
(a) The Trustee shall cease payment of benefits to Plan Participants and
their Beneficiaries if the Employer is Bankrupt. The Employer shall be
considered "Bankrupt" for purposes of this Trust Agreement if the Employer is
subject to a pending proceeding as a debtor under the United States Bankruptcy
Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of the Employer under federal and state law as set
forth below.
(1) The Board of Directors and the highest ranking officer of the
Employer shall have the duty to inform the Trustee in writing of the
Employer's Bankruptcy. If a person claiming to be a creditor of the
Employer alleges in writing to the Trustee that the Employer is Bankrupt,
the Trustee shall determine whether the Employer is Bankrupt and, pending
such determination, the Trustee shall discontinue payment of benefits to
Plan Participants or their Beneficiaries.
(2) Unless the Trustee has actual knowledge of the Employer's
Bankruptcy, or has received notice from the Employer or a person claiming
to be a creditor alleging that the Employer is Bankrupt, the Trustee
shall have no duty to inquire whether the Employer is Bankrupt.
(3) If at any time the Trustee has determined that the Employer is
Bankrupt, the Trustee shall discontinue payments to Plan Participants or
their Beneficiaries and hold the assets of the Trust for the benefit of
the Employer's general creditors. Nothing in this Trust Agreement shall
in any way diminish any rights of Plan
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Participants or their Beneficiaries to pursue their rights as general
creditors of the Employer with respect to benefits due under the Plan or
otherwise.
(4) The Trustee shall resume the payment of benefits to Plan
Participants or their Beneficiaries in accordance with Section 2 of this
Trust Agreement only after the Trustee has determined that the Employer
is not Bankrupt (or is no longer Bankrupt).
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b)
hereof and subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
Participants or their Beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
Participants or their Beneficiaries by the Employer in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4
PAYMENTS TO THE EMPLOYER
Except as otherwise provided in Section 12(d) herein, the Employer shall
have no right or power to direct the Trustee to return to the Employer or to
divert to others any of the Trust assets before all payment of benefits have
been made to Plan Participants and their Beneficiaries pursuant to the terms of
the Plan.
SECTION 5
INVESTMENT AUTHORITY
(a) The Trustee may invest in securities. 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 the Plan
Participants.
(b) The Employer shall have the right at anytime, and from time to time
in its sole discretion, to substitute assets of equal fair market value for any
asset held by the Trust. This right is exercisable by the Employer in a
nonfiduciary capacity without the approval or consent of any person in a
fiduciary capacity.
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SECTION 6
DISPOSITION OF INCOME
During the term of this Trust, all income received by the Trust shall be
accumulated and reinvested.
SECTION 7
ACCOUNTING BY THE TRUSTEE
The 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 required by the Employer or as are
agreed upon in writing between the Employer and the Trustee. Within 60 days
following the close of each calendar year and within sixty (60) days after the
removal or resignation of the Trustee, the Trustee shall deliver to the Employer
a written account of its administration of the Trust during such year or during
the period from the close of the last preceding year to the date of such removal
or resignation, setting forth all investments, receipts, disbursements and other
transactions affected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such year or as of the date of such removal or resignation, as the case may be.
SECTION 8
RESPONSIBILITY OF THE TRUSTEE
(a) The Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that the
Trustee shall incur no liability to any person for any action taken pursuant to
a direction, request or approval given by the Employer which is contemplated by,
and in conformity with, the terms of the Plan or this Trust and is given in
writing by the Employer. In the event of a dispute between the Employer and a
party, the Trustee may apply to a court of competent jurisdiction to resolve the
dispute and may deposit the disputed assets with the court for disposition.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Employer agrees to indemnify the Trustee, except
to the extent caused by the willful misconduct or substantial negligence of the
Trustee, against the Trustee's costs, expenses and liabilities (including,
without limitation, attorneys' fees and expenses) relating thereto and to be
primarily liable for such payments. If the Employer does not
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pay such costs, expenses and liabilities in a reasonably timely manner, the
Trustee may obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may also be counsel
for the Employer generally) with respect to any of its duties or obligations
hereunder.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred on
the Trustee by applicable law, unless expressly provided otherwise herein.
(f) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
SECTION 9
COMPENSATION AND EXPENSES OF THE TRUSTEE
The Employer shall pay all administrative and Trustee's fees and
expenses, except as provided in this Agreement. If not so paid, the fees and
expenses shall be paid from the Trust.
SECTION 10
RESIGNATION AND REMOVAL OF TRUSTEE
(a) The Trustee may resign at any time by written notice to the Employer,
which shall be effective 60 days after receipt of such notice unless the
Employer and the Trustee agree otherwise.
(b) The Trustee may be removed by the Employer on 30 days notice or upon
shorter notice accepted by the Trustee.
(c) 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 60 days after receipt of notice
of resignation, removal or transfer, unless the Employer extends the time limit.
(d) If the Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this Section. If no such appointment has
been made, the Trustee
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may apply to a court of competent jurisdiction for appointment of a successor or
for instructions. All reasonable expenses of the Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
SECTION 11
APPOINTMENT OF SUCCESSOR
(a) If the Trustee resigns or is removed in accordance with Section 10(a)
or (b) hereof, the Employer may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, as a successor to replace the Trustee upon resignation or removal.
The appointment shall be effective when accepted in writing by the new Trustee,
who shall have all of the rights and powers of the former Trustee, including
ownership rights in the Trust assets. The former Trustee shall execute any
instrument necessary or reasonably requested by the Employer 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 7 and 8 hereof. The successor Trustee shall not be responsible for and
the Employer 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.
SECTION 12
AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended by a written instrument executed
by the Trustee and the Employer. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or make the Trust revocable.
(b) The Trust shall not terminate until the date on which Plan
Participants and their Beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan. Upon termination of the Trust any assets remaining in
the Trust shall be returned to the Employer.
(c) Upon written approval of Participants or Beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan, the Employer may
terminate this Trust prior to the time all benefit payments under the Plan have
been made. All assets in the Trust at termination shall be returned to the
Employer.
(d) In the event that a Plan Participant fails to exercise an option
within the exercise period pursuant to the terms of the Plan, any assets
remaining in the Trust attributable to such option shall be returned to the
Employer.
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SECTION 13
MISCELLANEOUS
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Plan Participants and their Beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, excluding its choice of laws principles.
SECTION 14
EFFECTIVE DATE
The effective date of this Trust Agreement shall be November 1, 1997.
IN WITNESS WHEREOF, this Trust Agreement has been duly executed by the
parties hereto, effective as of the day and year first above written.
The FINOVA Group Inc., Employer ATTEST/WITNESS
By:_______________________________ _________________________________
Printed Name:_____________________ Printed Name:____________________
The Compensation Committee , Trustee
By:_______________________________ By:______________________________
Printed Name:_____________________ Printed Name:____________________
By:_______________________________ By:______________________________
Printed Name:_____________________ Printed Name:____________________
By:_______________________________ By:______________________________
Printed Name:_____________________ Printed Name:____________________
8 Version as of 02/27/98