Exhibit 10.10
TRUST UNDER OM GROUP, INC.
BENEFIT RESTORATION PLAN
This Trust Agreement, effective as of January 1, 1995, by and between
▇▇▇▇▇▇ CHEMICALS, INC., an Ohio corporation (the "Company") and National City
Bank ("Trustee"),
WITNESSETH THAT:
WHEREAS, Company has adopted that certain Benefit Restoration Plan
effective January 1, 1995 (hereinafter called the "Plan");
WHEREAS, Company has incurred or expects to incur liability under the
terms of the Plan with respect to the individuals participating in the Plan;
WHEREAS, Company wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of Company's creditors in the event of Company's
Insolvency, as herein defined, until paid to Plan participants and 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 maintained for the purpose of providing deferred
compensation for the Company's employees who will qualify as a select group of
management or highly compensated employees for purposes of Title I of the
Employee Retirement Income Security Act of 1974; and
WHEREAS, it is the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST.
(a) Company hereby deposits and will deposit with Trustee in trust
$10.00 which shall become the initial principal of the Trust to be held,
administered and disposed of by 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 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, and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon, while held as
part of this Trust, shall be held separate and apart from other funds of the
Company and shall be used exclusively for the uses and purposes of Plan
participants and general creditors as herein set forth. 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
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Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against Company. Any assets held by the
Trust will be subject to the claims of Company's general creditors under federal
and state law in the event of Insolvency., as defined in Section 3(a) herein.
(e) 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 Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.
(f) Notwithstanding Section 1(e) or any other provision of this
agreement, upon a Change of Control, Company shall as soon as possible, but in
no event longer than 10 days following the Change of Control, as defined herein,
make an irrevocable contribution to the Trust in an amount that is sufficient to
pay each Plan participant or beneficiary the benefits to which Plan participants
or their beneficiaries would be entitled pursuant to the terms of the Plans as
of the date on which Change of Control occurred.
SECTION 2. PAYMENT TO PLAN PARTICIPANTS AND THEIR
BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable in respect of each Plan
participant (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
Plan~, and the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the Plan participants
and their beneficiaries in accordance with such Payment Schedule. The Trustee
shall make provision for the reporting and withholding of any federal, state or
local taxes that may be required to be withheld with respect to the payment of
benefits pursuant to the terms of the Plan and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by Company.
(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Company or such party as it shall
designate under the Plan, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.
(c) Company may make payment of benefits directly to Plan participants
or their beneficiaries as they become due under the terms of the Plan. Company
shall notify Trustee of its decision to make payment of 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, Company shall make the balance of each such payment as it falls due.
Trustee shall notify Company when principal and earnings are not sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO
TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan participants and
their beneficiaries if the Company is Insolvent. Company shall be considered
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"Insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay
its debts as they become due, (ii) Company is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code, or (iii) Company is determined
to be insolvent by the Federal Deposit Insurance Corporation.
(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 Company under federal and state law as set forth
below:
(1) The Board of Directors and the Chief Executive Officer of
Company shall have the duty to inform Trustee in writing of Company's
Insolvency. If a person claiming to be a creditor of Company alleges in writing
to Trustee that Company has become Insolvent, Trustee shall determine whether
Company is Insolvent and, pending such determination, Trustee shall discontinue
payment of benefits to Plan participants or their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person claiming to be a
creditor alleging that Company is Insolvent, Trustee shall have no duty to
inquire whether Company is Insolvent. Trustee may in all events rely on such
evidence concerning Company's solvency as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a determination concerning
Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Plan participants or their
beneficiaries and shall hold the assets of the Trust for the benefit of the
Company's general creditors. nothing in this Trust Agreement shall in any way
diminish any rights of Plan participants or their beneficiaries to pursue their
rights as general creditors of Company with respect to benefits due under the
Plan or otherwise.
(4) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of this Trust
Agreement only after Trustee has determined that Company is not Insolvent (or is
no longer Insolvent)
(c) Provided that there are sufficient assets, if 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 Company in lieu of the payments provided
for hereunder during any such period of discontinuance.
SECTION 4. PAYMENTS TO COMPANY.
(a) Except as provided in Section 3 hereof and this Section 4, Company
shall have no right or power to direct Trustee to return to Company or to direct
to others any of the trust assets before all payments of benefits have been made
to Plan participants and their beneficiaries pursuant to the terms of the Plan.
Notwithstanding any other provision of this Trust, in the event of a
Participant's death, if the Trustee has one or more life insurance policies on
the life of the Participant, such policies and the proceeds thereof shall
constitute general assets of the Company and no person
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(including but not limited to the Participant or his or her Beneficiary) shall
have or acquire any interest in such assets, and promptly after the
Participant's death the Trustee shall return or pay to the Company any portion
of the proceeds thereof which would not be needed to make the payments due to
such deceased Participant's Beneficiary based on reasonable assumptions as
determined by the Company in its sole discretion.
(b) From time to time, if and when requested by the Company to do so,
the Trustee shall engage the services of an independent actuary as may be
mutually satisfactory to the Company and to the Trustee, at the expense of the
Company, to determine the actuarial present value of the maximum future benefits
that could become payable under the Plan and the actuarial present value of all
assets held in the Trust. The Company shall pay the fees of such independent
actuary and of any appraiser engaged by, or in connection with the engagement
of, such independent actuary to value any property held in the Trust, and such
fees shall not be paid by the Trustee or charged against Trust assets. The
independent actuary shall make its calculations based on the assumption that all
Participants who are employed by the Company on the date of calculation will
have salary increases from the date of calculation through the termination of
their employment with the Company of 4.5% per year and that no such Participant
will leave the employ of the Company for any reason other than (i) death prior
to retirement or (ii) retirement after becoming entitled to have the maximum
amount of benefits payable to the Plan participant or his or her beneficiary
that is possible under the Plan. In addition, the independent actuary shall use
the mortality, interest rate, and other actuarial assumptions (including
assumptions regarding ages at retirement) then being used for purposes of a
qualified retirement plan of the Company (or, if no such actuarial assumptions
are available or appropriate, then using such reasonably comparable current
actuarial assumptions as the independent actuary may determine) If the actuarial
present value of all assets held in the Trust exceeds 125% of the actuarial
present value of the maximum future benefits that could become payable under the
Plan, then Trustee shall pay the amount of any such excess over 125%, upon the
request of the Company, to the Company, except that if payment of all or part of
any such excess would leave the Trustee with insufficient liquid assets to pay
all premiums due and to become due on any life insurance policies held in the
Trust, the Trustee shall retain sufficient liquid assets to pay such premiums.
SECTION 5. INVESTMENT AUTHORITY.
(a) Trustee may invest in life insurance policies, any and all
securities or obligations (including stock or rights to acquire stock) including
securities or obligations issued by Company. All rights associated with assets
of the Trust shall be exercised by Trustee or the person designated by Trustee,
and shall in no event be exercisable by or at the direction of the Plan
participants.
(b) Company shall have the right, at any time, and from time to time
in Its sole discretion, to substitute assets of equal fair market value for any
asset held by the Trust. This right is exercisable by Company in a nonfiduciary
capacity Without the approval or consent of any person in a fiduciary capacity.
(c) The Company may maintain in force all life insurance policies held
in the Trust by paying premiums and other charges due thereon; but if any such
premiums or other charges are not paid directly by the Company, the Trustee
shall pay such premiums and other charges on or before the due date thereof.
Subject to the Trustee's obligation, as set forth in Section 2, to use Trust
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assets for payment of benefits that are not paid directly by the Company as and
when due, if premiums are due upon any life insurance policy held in the Trust
and those premiums are not paid when due by the Company, (i) to the extent the
Trustee has cash or its equivalent readily available for the payment of premiums
due or policy loans and/or dividends are available for such purpose, the Trustee
shall pay premiums due with such cash or its equivalent or policy loans and/or
dividends, as the Trustee may deed best; and (ii) if the Trustee does not have
sufficient cash or its equivalent readily available and policy loans and
dividends are not available, then the Trustee shall dispose of or otherwise use
other assets held by it in the Trust to generate the necessary cash or, if no
such other assets are available, the Trustee shall surrender one or more of the
life insurance policies in order to generate cash with which to pay premiums on
one or more of the other life insurance policies. The Trustee shall have no
liability to the Company or any other person if, as a result of an insufficiency
of cash or its equivalent, policy loans and dividends, and assets that can be
disposed of or otherwise used to generate cash, the Trustee is unable to pay
premiums as they become due.
SECTION 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY TRUSTEE.
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
Company and Trustee. Within sixty (60) days following the close of each calendar
year and within forty--five (45) days after the removal or resignation of
Trustee, Trustee shall deliver to Company 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 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 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 TRUSTEE.
(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 Company which is contemplated by, and
in conformity with, the terms of the Plan or this Trust and is given in writing
by Company. In the event of a dispute between Company and a party, Trustee may
apply to a court of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising in
connection with this Trust, Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
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such payments. If Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.
(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.
(e) Trustee shall have, without exclusion, all powers conferred on
Trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(f) However, notwithstanding the provisions of Section 8(e)above,
Trustee may loan to Company the proceeds of any borrowing against an insurance
policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to Trustee pursuant to this
Trust 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 301.7701--2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code of
1986 as amended.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all administrative expenses and Trustee's fees. If
not so paid, the fees and expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective forty--five (45) days after receipt of such notice unless
Company and Trustee agree otherwise.
(b) Trustee may be removed by Company on thirty (30) days notice or
upon shorter notice accepted by Trustee.
(c) Upon a Change of Control, as defined herein, Trustee may not be
removed by Company for one (1) year.
(d) If Trustee resigns within one (1) year after a Change of Control,
as defined herein, Company shall apply to a court of competent jurisdiction for
the appointment of a successor Trustee or for instructions.
(e) If Trustee resigns or is removed within two (2) years of a Change
of Control, as defined herein, Trustee shall select a successor Trustee in
accordance with the provisions of Section 11(b) hereof prior to the effective
date of Trustee's resignation or removal.
(f) 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 within thirty (30) days
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after receipt of notice of resignation, removal or transfer, unless Company
extends the time limit.
(g) If 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, Trustee may apply to a court of competent jurisdiction for
appointment of a successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative expenses of
the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed in accordance with Section 10 (a)
or (b) hereof, Trustee 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 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
instruments necessary or reasonably requested by Company or the successor
Trustee to evidence the transfer.
(b) If Trustee resigns or is removed pursuant to the provisions of
Section 10(e) hereof and selects a successor Trustee, Trustee may appoint any
third party such as a bank trust department or other party that may be granted
corporate trustee powers under state law. The appointment of a successor Trustee
shall be effective when accepted in writing by the new Trustee. The new Trustee
shall have all the rights and powers of the former Trustee, including ownership
rights in Trust assets. The former Trustee shall execute any instruments
necessary or reasonably requested by the successor Trustee to evidence the
transfer.
(c) 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
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.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing, no such
amendment will conflict with the terms of the Plan or shall 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
shall be returned to the Company.
(c) Upon written approval of participants or beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan, Company 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 Company.
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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 Ohio.
(d)For purposes of this Trust, Change of Control shall mean: The
purchase or other acquisition by any person, entity or group of
persons, within the meaning of section 13(d) or 14(d) of the
Securities Exchange Act of 1934 ("Act"), or any comparable
successor provisions, of beneficial ownership (within the meaning
of Rule l3d--3 promulgated under the Act) of 30 percent or more of
either the outstanding shares of common stock or the combined
voting power of Company's then outstanding voting securities
entitled to vote generally, or the approval by the stockholders of
Company of a reorganization, merger, or consolidation, in each
case, with respect to which persons who were stockholders of
Company immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than 50
percent of the combined voting power entitled to vote generally in
the election of directors of the reorganized, merged or
consolidated Company's then outstanding securities, or a
liquidation or dissolution of Company or of the sale of all or
substantially all of Company's assets.
SECTION 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be January 1, 1995.
IN WITNESS WHEREOF, the foregoing Trust Agreement has been duly
executed by the Company and the Trustee.
▇▇▇▇▇▇ CHEMICALS, INC. "Company" National City Bank "Trustee"
By: By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
Chairman, Board of Directors
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