ITLA CAPITAL CORPORATION RABBI TRUST AGREEMENT AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2005
Exhibit
10.14
AMENDED
AND RESTATED
EFFECTIVE
JANUARY 1, 2005
AMENDED
AND RESTATED
Amended
and Restated Effective January 1, 2005
This
Trust Agreement (the "Trust Agreement") is made and dated this 1st day of
February, 2006, by and between ITLA Capital Corporation, a Delaware corporation
(the "Employer") and UNION BANK OF CALIFORNIA, N.A. (the
"Trustee").
PURPOSE
(a) WHEREAS,
Employer has adopted the plan or plans attached as Exhibit A or which
subsequently may be designated in writing by Employer (the "Plans") pursuant
to
which Employer expects to incur unfunded deferred compensation liabilities
with
respect to certain employees of Employer.
(b) WHEREAS,
Employer 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 Employer's creditors in the event of Employer's Insolvency, as herein
defined, until paid to Plan participants in such manner and at such times
as
specified in the Plan(s);
(c) 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(s) as an unfunded
plan
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;
(d) WHEREAS,
it is the intention of Employer 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(s);
(e)
WHEREAS, since the Trust
Agreement has been amended several times, the Employer desires to amend and
restate the Trust Agreement to include the previously adopted amendments;
and
(f) The
Trust
Agreement is intended to comply with the applicable requirements of Section
409A
of the Internal Revenue Code of 1986, as amended (the “Code”) and related
guidance of general applicability issued thereunder (together referred to
herein
as "Section 409A") effective as of January 1, 2005, and shall be operated
in
accordance with that intention..
NOW,
THEREFORE, the parties do hereby establish the Trust and agree that the Trust
shall be comprised, held and disposed of as follows:
ARTICLE
I
ESTABLISHMENT
OF TRUST
1.1 Establishment
of Trust.
Employer hereby deposits with the Trustee in Trust one share of ITLA Capital
Corporation common stock, which shall become the principal of the Trust to
be
held, administered and disposed of by the Trustee as provided in the Trust
Agreement.
1.2 Revocability
of Trust.
The
Trust hereby established is revocable by Employer; it shall become irrevocable
upon a Change of Control, as defined herein.
1.3 Grantor
Trust.
The
Trust is intended to be a grantor trust, of which 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.
1.4 Purpose
of Trust.
The
principal of the Trust, and any earnings thereon shall be held separate and
apart from other funds of Employer and shall be used exclusively for the
uses
and purposes of Participants and Employer's general creditors as herein set
forth. Plan participants and beneficiaries of deceased participants (hereinafter
called "Participants") shall have no preferred claim on, or any beneficial
ownership interest in, any assets of the Trust. Any rights created under
the
Plan(s) and this Trust Agreement shall be mere unsecured contractual rights
of
Participants against Employer. Any assets held by the Trust will be subject
to
the claims of Employer's general creditors under federal and state law in
the
event of Insolvency, as defined in Article XI herein.
1.5 Payments
to Employer.
Except
as provided in Section 1.2 hereof, after the Trust has become irrevocable,
Employer shall have no right or power to direct the Trustee to return to
Employer or to divert to others any of the Trust assets before all payment(s)
of
benefits have been made to Participants pursuant to the terms of the
Plan(s).
1.6 Signing
Authority; Administrator.
Employer shall certify in writing to the Trustee the names and specimen
signatures of all those who are authorized to act as or on behalf of Employer,
and those names and specimen signatures shall be updated as necessary by
a duly
authorized official of Employer. Employer shall promptly notify the Trustee
if
any person so designated is no longer authorized to act on behalf of Employer.
Until the Trustee receives written notice that a person is no longer authorized
to act on behalf of Employer, the Trustee may continue to rely on Employer's
designation of such person.
1.7 Acceptance
of Assets; Trust Composition.
All
contributions or transfers shall be received by the Trustee in cash or in
any
other property acceptable to the Trustee. The Trust shall consist of the
contributions and transfers received by the Trustee, together with the income
and earnings from them and any increments to them. The Trustee shall hold,
manage and administer the Trust in accordance with this Trust Agreement without
distinction between principal and income.
1.8 Contributions.
Employer holds certain assets which have been accumulated by Employer to
assist
in its obligation to pay nonqualified retirement benefits to select employees.
Such assets shall be transferred to the Trust and invested in accordance
with
the terms of this Trust Agreement. 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. In addition,
upon a Change of Control, Employer shall, as soon as possible but in no event
longer than fifteen (15) 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 Participant the benefit to which such Participant
would
be entitled pursuant to the terms of the Plan(s) as of the date on which
the
Change of Control occurred.
1.9 No
Duty of the Trustee to Enforce Collection.
Notwithstanding anything herein to the contrary, the Trustee shall have no
authority or obligation to enforce the collection of any contribution or
transfer to the Trust.
1.10 Plan
Administration.
Employer and not the Trustee shall be responsible for administering the Plans
(including without limitation determining the rights of Employer's employees
to
participate in a Plan, determining any Participant's right to benefits under
such Plan), and issuing statements to Participants of their interest in the
Trust and Plan; provided, however, that the Trustee may specifically agree
in
writing to provide administrative services with respect to one or more Plan(s).
In addition, upon a Change of Control, the Trustee shall maintain Participant
Accounts as provided in Section 1.12 of this Trust Agreement and shall make
payments to Participants as provided in Section 4.2 of the Trust
Agreement.
1.11 Change
of Control.
The
occurrence of any of the following events with respect to the Company: (1)
any
person (as the term is used in section 13(d) and 14(d) of the Securities
Exchange Act of 1934 (the “Exchange Act”) is or becomes the beneficial owner (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly of
securities of the Company representing 33.33% or more of the Company’s
outstanding securities; (2) individuals who are members of the Board of
Directors of the Company on the date hereof (the “Incumbent Board”) cease for
any reason to constitute at least a majority thereof, provided
that any
person becoming a director subsequent to the date hereof whose election was
approved by a vote of at least two thirds of the directors comprising the
Incumbent Board, or whose nomination for election by the Company’s stockholders
was approved by the nominating committee serving under an Incumbent Board,
shall
be considered a member of the Incumbent Board; (3) a reorganization, merger,
consolidation, sale of all or substantially all of the assets of the Company
or
a similar transaction in which the Company is not the resulting entity (unless
the continuing ownership requirements clause (4) below are met with respect
to
the resulting entity); or (4) a merger or consolidation of the Company with
any
other corporation other than a merger or consolidation in which the voting
securities of the Company outstanding immediately prior thereto represent
at
least 66.67% of the total voting power represented by the voting securities
of
the Company or the surviving entity outstanding immediately after such merger
or
consolidation. The term “Change in Control” shall not include: (1) an
acquisition of securities by an employee benefit plan of the Company; or
(2) any
of the above mentioned events or occurrences which require but do not receive
the requisite government or regulatory approval to bring the event or occurrence
to fruition. Notwithstanding anything herein to the contrary, if and to the
extent necessary to avoid the application of Code Section 409A(a)(1) (regarding
the sanctions applicable with respect to nonqualified deferred compensation
plans that do not comply with the requirements of Code Section 409A) to any
Participant in a Plan, the term “Change of Control” shall, instead of the
definition provided above, mean an event described in Code Section
409A(a)(2)(A)(v) , or regulations or guidance of general applicability
thereunder.
The
Trustee shall have no independent duty to determine that a Change in Control
has
occurred and shall not be required to take any action or refrain from taking
any
actions hereunder which are based on a Change in Control having occurred
prior
to the time it receives written notice from Employer or a Participant that
a
Change in Control has occurred or will occur and has had a reasonable
opportunity to determine whether a Change in Control, in fact, has
occurred.
At
the
Trustee's request, Employer shall furnish such evidence as may be necessary
to
enable the Trustee to determine whether a Change in Control has occurred.
In
taking or refraining from any action under this Trust Agreement, the Trustee
may
rely on its determination, including an opinion of counsel (who may be counsel
to Employer or the Trustee), that a Change in Control has occurred. The
Trustee's determination as to whether a Change in Control has occurred shall
be
binding and conclusive on all persons.
1.12 Participant
Accounts.
Employer shall maintain in an equitable manner a separate bookkeeping account
for each Participant under a Plan (“Account”) in which it shall keep a record of
the benefit of such Participant under such Plan. Employer may appoint a
third-party administrator to maintain such Accounts. If the Trustee is directed
by Employer to segregate the Trust into separate bookkeeping Accounts for
each
Participant, then, at the time it makes a contribution to the Trust, Employer
shall certify to the Trustee the amount of such contribution being made in
respect of each Participant under each Plan. Notwithstanding the preceding
sentence, upon a Change of Control, the Trustee shall be responsible for
maintaining a separate Account under each Plan and the Trust based upon
segregating the Accounts using Employer’s latest statement of value for each
Participant’s Account. The Trustee shall thereafter adjust such Accounts
pursuant to the procedures described in the Plan. The Trustee may appoint
a
third-party administrator to assist the Trustee in the maintenance of the
Accounts. The reasonable expenses incurred by the Trustee in maintaining
such
Accounts shall be paid by Employer within thirty (30) days of submission of
invoices to Employer by the Trustee, or if not so paid, reimbursed to the
Trustee from the Trust. Employer shall reimburse the Trust for such expense,
but
the Trustee shall have no duty to enforce Employer’s obligation for such
reimbursement.
The
Trustee may rely on information provided to the Trustee by Employer and the
Trustee’s and Employer’s determination of Account values shall be conclusive and
binding on all interested parties.
1.13 Tax
Reporting.
Employer and not the Trustee shall be responsible for all income tax reporting
and calculation and payment of any wage withholding or other tax requirements
in
connection with the Trust and any contributions thereto, and any income earned
thereby, and payments or distributions therefrom, and Employer agrees to
indemnify and defend the Trustee against any liability for any such taxes,
interest or penalties resulting from or relating to the Trust.
ARTICLE
II
INVESTMENTS
2.1 Employer
is Investment Manager.
Employer shall have the power over and responsibility for the management
and
investment of Trust assets. Employer may appoint an Investment Manager to
direct
the investment of Trust assets, provided the Trustee is notified in writing
prior to such appointment.
Except
as
set forth in Section 2.4 below, the Trustee shall have no duty to make
recommendations regarding Trust assets and shall retain assets until directed
in
writing by Employer or Investment Manager to dispose of them.
2.2 Funding
Policy and Investment Guidelines.
Employer shall have the responsibility for establishing and carrying out
a
funding policy and method, consistent with the objectives of the Plans, taking
into consideration the Plans' short-term and long-term financial needs. The
Trustee's responsibility for investment and diversification of the assets
in the
portion of the Trust for which the Trustee has investment discretion, if
any,
shall be subject to, and is limited by, the investment guidelines issued
to it
by Employer. It is understood that, unless otherwise agreed in writing,
Employer, rather than the Trustee, shall be responsible for the overall
diversification of Trust assets.
2.3 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.
2.4 Effect
of Change of Control.
Upon
and following a Change of Control, the Trustee shall have full responsibility
for the investment and reinvestment of all Trust assets except for amounts
invested in Employer Securities and insurance contracts, and Employer’s powers
to invest, manage and control Trust assets, including the power to appoint
Investment Managers and issue investment guidelines with respect to the Trust,
shall be limited to amounts invested in Employer Securities and insurance
contracts as of the date of the Change of Control. The Trustee may, in its
sole
discretion, appoint one or more Investment Managers with respect to the Trust
or
any part thereof and may establish and issue to such Investment Managers
investment guidelines.
2.5 Employer
Securities.
The
Trustee may invest in Employer Securities (including stock or rights to acquire
stock) or other obligations issued by Employer. Employer shall retain sole
investment management authority and responsibility for any Employer Securities.
In no event shall the Trustee have any authority to sell Employer Securities
held in the Trust except upon the written approval of Employer.
Employer
shall have the right at any time prior to a Change of Control, 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 Employer in a
non-fiduciary capacity without the approval or consent of any person in a
fiduciary capacity. Upon a Change of Control, Employer’s right to substitute
assets shall only extend to Employer Securities held in the Trust.
Employer
shall not direct the investment of Trust funds in Employer Securities unless
Employer is satisfied that the Employer Securities are exempt from registration
under the Federal Securities Act of 1933, as amended, and are exempt from
qualification under the California Corporate Securities Law of 1968, as amended,
and from any other applicable blue sky law, or in the alternative that the
Employer Securities have been so registered and/or qualified. Employer shall
also specify what restrictive legend on transfer, if any, is required to
be set
forth on the certificates for the Employer Securities and the procedure to
be
followed by the Trustee to effectuate a resale of such Employer Securities.
Employer shall only direct the investment of funds into Employer Securities
(i) if those securities are traded on an exchange permitting a readily
ascertainable fair market value, or (ii) if Employer shall have obtained a
current valuation by an independent appraiser, and periodically supplies
updated
valuations while the Employer Securities remain in the Trust. In determining
the
value of Employer Securities on a periodic basis, the Trustee may conclusively
rely on the certified appraisal or other form of valuation submitted to it
by
Employer or the Investment Manager, if any. The Trustee shall vote Employer
Securities or sell pursuant to a tender offer as directed by written
instructions of Employer. Employer shall indemnify and hold harmless the
Trustee
with respect to any action taken or refrained from with regard to voting
or
tendering Employer Securities, it being expressly understood that the Trustee
shall have no discretion with respect to such action unless required by
law.
The
Trustee shall not be liable under the Plan or the Trust for any investment
in or
retention of Employer Securities held as Trust assets, whether retention
is due
to instructions to retain, or inability to sell due to any Federal or State
securities law restrictions, or the unmarketable or illiquid nature of the
investment.
ARTICLE
III
TRUSTEE'S
POWERS
3.1 General
Trustee's Powers.
The
Trustee shall have, without exclusion, all powers conferred on Trustees by
applicable law, unless expressly provided otherwise in this Trust Agreement,
provided, however, that if an insurance policy is held as an asset of the
Trust,
the Trustee shall have no power to name a beneficiary of the policy other
than
the Trust, to assign the policy (as distinct from conversion of the policy
to a
different form) other than to a successor Trustee, or to loan to any person
the
proceeds of any borrowing against such policy.
(a) To
invest
and reinvest the Trust or any part thereof in any one or more kind, type,
class,
item or parcel of property, real, personal or mixed, tangible or intangible;
or
in any one or more kind, type, class, item or issue of investment or security;
or in any one or more kind, type class or item of obligation, secured or
unsecured; or in any combination of them;
(b) To
acquire, sell and exercise options to buy securities ("call" options) and
to
acquire, sell and exercise options to sell securities ("put"
options);
(c) To
buy,
sell, assign, transfer, acquire, loan, lease (for any purpose, including
beyond
the life of this Trust), exchange and in any other manner to acquire, manage,
deal with and dispose of all or any part of the Trust property, for cash
or
credit;
(d) To
make
deposits with any bank or savings and loan institution, including any such
facility of the Trustee or an affiliate thereof, provided that the deposit
bears
a reasonable rate of interest;
(e) To
retain
all or any portion of the Trust in cash temporarily awaiting investment or
for
the purpose of making distributions or other payments, without liability
for
interest thereon, notwithstanding trustee's receipt of float;
(f) To
borrow
money for the purposes of the Trust from any source other than a party in
interest of the Plans, with or without giving security; to pay interest;
to
issue promissory notes and to secure the repayment thereof by pledging all
or
any part of the Trust assets;
(g) To
take
all of the following actions: to vote proxies of any stocks, bonds or other
securities; to give general or special proxies or powers of attorney with
or
without power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments incidental
thereto; to consent to or otherwise participate in corporate reorganizations
or
other changes affecting corporate securities and to delegate discretionary
powers and to pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to stocks,
bonds, securities or other property held in the Trust;
(h) To
make,
execute, acknowledge and deliver any and all documents of transfer and
conveyance and any and all other instruments that may be necessary or
appropriate to carry out the powers herein granted;
(i) To
raze
or move existing buildings; to make ordinary or extraordinary repairs,
alterations or additions in and to buildings; to construct buildings and
other
structures and to install fixtures and equipment therein;
(j) To
pay or
cause to be paid from the Trust any and all real or personal property taxes,
income taxes or other taxes or assessments of any or all kinds levied or
assessed upon or with respect to the Trust or the Plans;
(k) Subject
to the limitations of 3.1, to hold term or ordinary life insurance contracts
or
to acquire annuity contracts on the lives of Participants (but in the case
of
conflict between any such contract and a Plan, the terms of the Plan shall
prevail); to pay from the Trust the premiums on such contracts; to distribute,
surrender or otherwise dispose of such contracts; to pay the proceeds, if
any,
of such contracts to the proper persons in the event of the death of the
insured
Participant; to enter into, modify, renew and terminate annuity contracts
of
deposit administration, of immediate participation or other group or individual
type with one or more insurance companies and to pay or deposit all or any
part
of the Trust thereunder; to provide in any such contract for the investment
of
all or any part of funds so deposited with the insurance company in securities
under separate accounts; to exercise and claim all rights and benefits granted
to the contract holder by any such contracts. All payments and exercise of
all
powers with respect to insurance contracts shall be solely on the direction
of
Employer;
(l) To
exercise all the further rights, powers, options and privileges granted,
provided for, or vested in trustees generally under applicable federal or
state
laws, as amended from time to time, it being intended that, except as otherwise
provided in this Trust, the powers conferred upon the Trustee herein shall
not
be construed as being in limitation of any authority conferred by law, but
shall
be construed as in addition thereto.
(m) 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.
3.2 Additional
Powers.
In
addition to the other powers enumerated above and subject to the limitations
of
Article II of this Trust Agreement, the Trustee is authorized and
empowered:
(a) To
invest
funds in any type of interest-bearing account including, without limitation,
time certificates of deposit or interest-bearing accounts issued by UNION
BANK
OF CALIFORNIA, N.A. To use other services or facilities provided by the
UnionBanCal Corporation (UNBC), its subsidiaries or affiliates including
Union
Bank of California, N.A. (Bank), to the extent allowed by applicable law
and
regulation. Such services may include but are not limited to (1) the placing
of
orders for the purchase, exchange, investment or reinvestment of securities
through any brokerage service conducted by, and (2) the purchase of units
of any
registered investment company managed or advised by Bank, UNBC, or their
subsidiaries or affiliates and/or for which Bank, UNBC or their subsidiaries
or
affiliates act as custodian or provide other services for a fee, including,
without limitation, the HighMark Group of mutual funds or the Stepstone Funds.
The parties hereby acknowledge that the Bank may receive fees for such services
in addition to the fees payable under this Agreement. Fee schedules for
additional services shall be delivered to the appropriate party in advance
of
the provision of such services. Independent fiduciary approval of compensation
being paid to the Bank will be sought in advance to the extent required under
applicable law and regulation.
If
Union
Bank of California, N.A. does not have investment discretion, the services
referred to above, as well as any additional services, shall be utilized
only
upon the appropriate direction of an authorized party.
(b) To
cause
all or any part of the Trust to be held in the name of the Trustee (which
in
such instance need not disclose its fiduciary capacity) or, as permitted
by law,
in the name of any nominee, including the nominee name of any depository,
and to
acquire for the Trust any investment in bearer form; but the books and records
of the Trust shall at all times show that all such investments are a part
of the
Trust and the Trustee shall hold evidences of title to all such investments
as
are available;
(c) To
serve
as custodian with respect to the Trust assets, to hold assets or to hold
eligible assets at the Depository Trust Company or other
depository;
(d) To
employ
such agents and counsel as may be reasonably necessary in administration
and
protection of the Trust assets and to pay them reasonable compensation; to
employ any broker-dealer covered in the self-dealing section, and pay to
such
broker-dealer its standard commissions; to settle, compromise or abandon
all
claims and demands in favor of or against the Trust; and to charge any premium
on bonds purchased at par value to the principal of the Trust without
amortization from the Trust, regardless of any law relating
thereto;
(e) To
abandon, compromise, contest, arbitrate or settle claims or demands; to
prosecute, compromise and defend lawsuits, but without obligation to do so,
all
at the risk and expense of the Trust;
(f) To
permit
such inspections of documents at the principal office of the Trustee as are
required by law, subpoena or demand by United States or state agency during
normal business hours of the Trustee;
(g) To
comply
with all requirements imposed by law;
(h) To
seek
written instructions from Employer on any matter and await written instructions
without incurring any liability. If at any time Employer should fail to give
directions to the Trustee, the Trustee may act in the manner that in its
discretion it deems advisable under the circumstances for carrying out the
purposes of this Trust. Such actions shall be conclusive on Employer and
the
Participants on any matter if written notice of the proposed action is given
to
Employer five (5) days prior to the action being taken, and the Trustee receives
no response;
(i) To
compensate such executive, consultant, actuarial, accounting, investment,
appraisal, administrative, clerical, secretarial, custodial, depository and
legal firms, personnel and other employees or assistants as are engaged by
Employer in connection with the administration of the Plans and to pay from
the
Trust the necessary expenses of such firms, personnel and assistants, to
the
extent not paid by Employer;
(j) To
impose
a reasonable charge to cover the cost of furnishing to Participants statements
or documents;
(k) To
act
upon proper written directions of Employer or any Participant including
directions given by photostatic teletransmission using facsimile signature.
If
oral instructions are given, to act upon those in the Trustee's discretion
prior
to receipt of written instructions. The Trustee's recording or lack of recording
of any such oral instructions taken in the Trustee's ordinary course of business
shall constitute conclusive proof of the Trustee's receipt or non-receipt
of the
oral instructions;
(l) To
pay
from the Trust the expenses reasonably incurred in the administration of
the
Trust;
(m) To
maintain insurance for such purposes, in such amounts and with such companies
as
Employer shall elect, including insurance to cover liability or losses occurring
by reason of the acts or omissions of fiduciaries (but only if such insurance
permits recourse by the insurer against the fiduciary in the case of a breach
of
a fiduciary obligation by such fiduciary);
(n) As
directed by Employer prior to a Change of Control, and by Employer or by
a
Participant upon or following a Change of Control, to cause the benefits
provided under the Plans to be paid directly to the persons entitled thereto
under the Plans, and in the amounts and at the times and in the manner specified
by the Plans, and to charge such payments against the Trust and Accounts
with
respect to which such benefits are payable;
(o) To
exercise and perform any and all of the other powers and duties specified
in
this Trust Agreement or the Plans; and in addition to the powers listed herein,
to do all other acts necessary or desirable for the proper administration
of the
Trust, as though the absolute owner thereof.
ARTICLE
IV
TRUSTEE
AND EMPLOYER DUTIES
4.1 Legal
Duties.
The
Trustee and Employer shall exercise any of the foregoing powers from time
to
time as required by law.
4.2 Payments
to Participants
(a) Employer
shall deliver to the Trustee a schedule (the "Payment Schedule") that indicates
the amounts payable in respect of each Participant, that provides a formula
or
other instructions acceptable to the Trustee for determining the amount so
payable, the form in which such amount is to be paid (as provided for or
available under the Plan(s)), and the time of commencement for payment of
such
amounts. Except as otherwise provided herein, the Trustee shall make payments
to
the Participants in accordance with such Payment Schedule. As directed by
Employer, 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(s) and
shall pay amounts withheld to the appropriate taxing authorities or determine
that such amounts have been reported, withheld and paid by
Employer.
(b) The
entitlement of a Participant to benefits under the Plan(s) shall be determined
by Employer or such party as it shall designate under the Plan(s), and any
claim
for such benefits shall be considered and reviewed under the procedures set
out
in the Plan(s).
(c) Employer
may make payment of benefits directly to Participants as they become due
under
the terms of the Plan(s). Employer shall notify the Trustee of its decision
to
make payment of benefits directly prior to the time amounts are payable to
Participants. In addition, if the principal of the Trust, and earnings thereon,
are not sufficient to make payments of benefits in accordance with the terms
of
the Plan(s), Employer shall make the balance of each such payment as it falls
due. The Trustee shall notify Employer where principal and earnings are not
sufficient. The Trustee shall have no duty or obligation to enforce or compel
Employer to make payments hereunder. Employer may direct the Trustee to
reimburse Employer for payments made directly by Employer to
Participants.
(1) In
the
event payments are made by Employer directly to Participants, Employer shall
have sole responsibility 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(s) and shall pay amounts
withheld to the appropriate taxing authority.
(2) Trustee
shall have no duty or responsibility with respect to the above stated reporting,
withholding or payment of taxes and shall have no responsibility to determine
that Employer has provided for such reporting, withholding or payment of
such
taxes.
(3) Employer
shall indemnify and hold the Trustee harmless from any and all losses, claims,
penalties or damages which may occur as a result of the Trustee following
in
good faith the written direction of Employer to reimburse Employer for payments
made hereunder to Participants and arising from Employer’s tax reporting,
withholding and payment obligations hereunder.
(d) Upon
the
satisfaction of all liabilities of Employer under all Plans to all Participants
the Trustee shall hold or distribute the Trust in accordance with the written
instructions of Employer. Except as provided in (c) above, at no time prior
to
Employer's Insolvency, as defined in Article XI, or the satisfaction of all
liabilities of Employer under the Plans in respect of all Participants having
Accounts hereunder shall any part of the Trust revert to Employer.
4.3 Accounts
and Records.
The
Trustee shall keep accurate and detailed records of all investments, receipts,
disbursements and all other transactions required to be done, including such
specific records as shall be agreed upon in writing between Employer and
the
Trustee. All such accounts, books and records shall be open to inspection
and
audit at all reasonable times by Employer and by the Participants. Within
sixty
(60) days after the close of each quarter and Plan year and within sixty
(60)
days after the resignation or removal of the Trustee as provided in Article
VI
hereof, the Trustee shall render to Employer a written account showing in
reasonable summary the investments, receipts, disbursements and other
transactions engaged in by the Trustee during the preceding Plan Year or
accounting period with respect to the Trust. Such accounting shall set forth
the
assets, liabilities and transactions of the Trust. Employer shall have sixty
(60) days after the Trustee's mailing of each such quarterly or final account
within which to file with the Trustee written objections to such account.
Upon
the expiration of each such period, the Trustee shall be forever released
and
discharged from all liability and accountability to Employer with respect
to the
propriety of its acts and transactions shown in such accounting except with
respect to any such acts or transactions as to which Employer files written
objections within such sixty-day period with the Trustee.
Notwithstanding
anything herein to the contrary, the Trustee shall have no duty or
responsibility to obtain valuations of any assets of the Trust Fund, the
value
of which is not readily determinable on an established market. Employer shall
bear sole responsibility for determining said valuations and shall be
responsible for providing said valuations to the Trustee in a timely manner.
The
Trustee may conclusively rely on such valuations provided by Employer and
shall
be indemnified and held harmless by Employer with respect to such
reliance.
4.4 Reports.
The
Trustee shall file such descriptions and reports and shall furnish such
information and make such other publications, disclosures, registrations
and
other filings as are required of the Trustee by law. The Trustee shall have
no
responsibility to file reports or descriptions, publish information or make
disclosures, registrations or other filings unless directed by
Employer.
4.5 Follow
Employer Direction.
The
Trustee shall have the power and duty to comply promptly with all proper
directions of Employer.
4.6 Information
to be Provided to the Trustee.
Employer shall maintain and furnish the Trustee with all reports, documents
and
information as shall be required by the Trustee to perform its duties and
discharge its responsibilities under this Trust Agreement, including without
limitation a certified copy of each of the Plans and all amendments thereto.
In
addition, upon a Change of Control, Employer shall promptly provide the Trustee
with written reports setting forth the name, address, date of birth and social
security number of each Participant, a listing of each Participant’s Account as
of the last valuation prior to the Change of Control and a listing of each
Participant’s benefit under each Plan as of the most recent valuation date prior
to the Change of Control. Notwithstanding the foregoing, at any time after
a
Change of Control, the Trustee may rely on information provided to the Trustee
by a Participant if Employer fails to provide such information.
The
Trustee shall be entitled to rely on the most recent reports, documents and
information furnished to it by Employer. Employer shall be required to notify
the Trustee as to the termination of employment of any Participant by death,
disability, retirement or otherwise.
Employer
shall arrange for each Investment Manager if appointed pursuant to Section
2.1,
and each insurance company issuing contracts held by the Trustee pursuant
to
Section 3.1(k), to furnish the Trustee with such valuations and reports as
are
necessary to enable the Trustee to fulfill its obligations under this Trust
Agreement, and the Trustee shall be fully protected in relying upon such
valuations and reports.
4.7 Payments
to Participants and Recording Upon Change of Control.
(a) Following
a Change of Control, the Trustee shall not be subject to the provisions of
Section 4.2(a) (regarding payments to Participants directed by Employer),
but rather shall commence distributions from the separate Account of a
Participant upon the receipt of written notification by Employer or by the
Participant that such Participant has become entitled to receive benefit
payments under a Plan. Such notification shall include the amount of such
payments, the form and method of payment, the basis for the Participant’s claim
and the Participant’s name, address and social security number.
The
Trustee may take any reasonable steps it deems necessary to verify that the
Participant is entitled to receive the benefits claimed under the Plans.
If the
Trustee determines in good faith that a Participant is entitled to receive
benefits under one or more of the Plans, the Trustee shall distribute to
the
Participant assets from the Trust in an amount equal to the benefit due
Participant (less applicable withholdings). The Trustee shall have no
responsibility for and shall incur no liability with respect to any payment
made
pursuant to a direction received in accordance with this Section 4.7 or
with respect to the Trustee’s good faith determination that a Participant is or
is not entitled to the payments claimed hereunder.
(b) Upon
a
Change of Control, the Trustee shall maintain all records regarding the Trust
and its investments and such other Participant records specified in this
Trust
Agreement, including the maintenance of the separate Accounts of each
Participant as provided in Section 1.12. All such records shall be made
available promptly on the request of Employer. The Trustee shall also prepare
and distribute annual or more frequent statements to the
Participants.
ARTICLE
V
RESTRICTIONS
ON TRANSFER
5.1 Persons
to Receive Payment.
(a) The
Trustee shall, except as otherwise provided in Article XI, Section 4.2(d)
and Subsection (b) hereunder, pay all amounts payable hereunder only to the
person or persons designated under the Plans or deposit such amounts to the
Participant's checking or savings account as directed by Employer and not
to any
other person or corporation, and only to the extent of assets held in the
Trust,
and shall follow written instructions by Employer. Prior to a Change of Control,
Employer's written instructions, to the Trustee to make distributions or
not to
make distributions, and the amount thereof, shall be conclusive on all
Participants. Upon and following a Change of Control, distributions shall
be
made in accordance with Section 4.7 of this Trust Agreement.
(b) Should
any controversy arise as to the person or persons to whom any distribution
or
payment is to be made by the Trustee, or as to any other matter arising in
the
administration of the Plans or Trust, the Trustee may retain the amount in
controversy pending resolution of the controversy or the Trustee may file
an
action seeking declaratory relief and/or may interplead the Trust assets
in
issue, and name as necessary parties Employer, the Participants and/or any
or
all persons making conflicting demands.
(c) The
Trustee shall not be liable for the payment of any interest or income, except
for that earned as a Trust investment, on any amount withheld or interpleaded
under subsection (b).
(d) The
reasonable expenses of the Trustee for taking any action under subsection
(b)
shall be paid to the Trustee by Employer, but if Employer fails to pay such
expenses within thirty (30) days of receipt of an invoice from the Trustee,
then such expenses shall be paid to the Trustee from the Trust.
5.2 Assignment
and Alienation Prohibited.
Benefits payable to Participants 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. Notwithstanding the foregoing, the Trust shall
at
all times remain subject to the claims of creditors of Employer in the event
Employer becomes Insolvent as provided in Article XI.
ARTICLE
VI
RESIGNATION,
REMOVAL AND SUCCESSION
6.1 Resignation
or Removal of the Trustee.
The
Trustee may resign at any time by written notice to Employer, which shall
be
effective ten (10) days after receipt of such notice unless Employer and
the Trustee agree otherwise. Prior to a Change of Control, Employer may remove
the Trustee upon ten (10) days’ written notice to the Trustee (which notice
may be waived by the Trustee). Upon and after the occurrence of a Change
of
Control, the Trustee may be removed only (i) by Employer with the written
consent of a majority of Participants; or (ii) by the written notice of a
majority of Participants. The Trustee may conclusively rely on Employer’s
certification that a majority of Participants has consented to the removal
of
the Trustee.
6.2 Designation
of Successor.
Upon
notice of the Trustee's resignation or removal, Employer shall immediately
designate a successor Trustee who will accept transfer of the assets of the
Trust unless otherwise agreed to by the Trustee; provided that, upon and
after
the occurrence of a Change of Control, such appointment shall be effected
only
(i) by Employer with the written consent of a majority of the Participants;
or (ii) by the written notice of a majority of the Participants. The
Trustee may conclusively rely on Employer’s certification that a majority of
Participants has consented.
Notwithstanding
the preceding paragraph, if a successor Trustee is not designated within
ten (10) days of notice of the Trustee's resignation or removal, then the
President and Chief Financial Officer of Employer are hereby designated as
the
successor Co-Trustees. If such individuals are Participants in the Plan,
then
the highest ranking officer or executive of Employer who is not a Participant
in
the Plan shall be the successor Trustee.
6.3 Transfer
of Assets.
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 as soon as administratively feasible after receipt
of notice of resignation, removal or transfer and appointment of and acceptance
by successor Trustee, unless Employer extends the time limit.
6.4 Court
Appointment of Successor.
If the
Trustee resigns or is removed, a successor shall be appointed, in accordance
with Section 6.2 hereof, by the effective date of resignation or removal
under
paragraph 6.1 of this Article VI. If no such appointment has been made
after a Change of Control, the Trustee 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 paid by
Employer within thirty (30) days of receipt from the Trustee of an invoice
for such expenses, or if not so paid, shall be allowed as administrative
expenses of the Trust. Until a successor Trustee is appointed, the Trustee
shall
be entitled to be compensated for its services according to its published
fee
schedule then in effect for acting as Trustee.
6.5 Successor's
Powers.
A
successor Trustee shall have the same powers and duties as those conferred
upon
the original Trustee hereunder. A resigning Trustee shall transfer the Trust
assets and shall deliver the assets of the Trust to the successor Trustee
as
soon as practicable. The resigning Trustee is authorized, however, to reserve
such amount as may be necessary for the payment of its fees and expenses
incurred prior to its resignation, and the Trust assets shall remain liable
to
reimburse the resigning Trustee for all fees and costs, expenses or attorneys'
fees or losses incurred, whether before or after resignation, due solely
to the
Trustee's holding title to and administration of Trust assets.
6.6 Successor's
Duties.
A
successor Trustee shall have no duty to audit or otherwise inquire into the
acts
and transactions of its predecessor.
ARTICLE
VII
AMENDMENT
7.1 Power
to Amend.
This
Trust Agreement may be amended by a written instrument executed by the Trustee
and Employer. No such amendment shall conflict with the terms of the Plan(s)
nor
shall it make the Trust revocable after it has become irrevocable in accordance
with Section 1.2.
7.2 Limitation
on Amendments Following a Change of Control.
Following a Change of Control, no amendment signed by Employer and the Trustee
shall become effective without the written consent of a two-thirds majority
of
the Participants then participating in the Plan. The Trustee may conclusively
rely on Employer’s certification that two-thirds majority has voted in favor of
amendment.
ARTICLE
VIII
LIABILITIES
8.1 Declaration
of Intent.
To the
full extent permitted by law, it is the intent of this Article to relieve
each
fiduciary from all liability for any acts or omissions of any other fiduciary
or
any other person and to declare the absence of liabilities of all persons
referred to in this Article to the extent not imposed by law or by provisions
of
this Trust Agreement. Each of the following Sections, in declaring such
limitation, is set forth without limiting the generality of this Section
but in
each case shall be subject to the provisions, limitations and policies set
forth
in this Section.
8.2 Liability
of the Trustee.
(a) The
Trustee shall have no powers, duties or responsibilities with regard to the
administration of the Plans or to determine the rights or benefits of any
person
having or claiming an interest under the Plans or in the Trust or under this
Trust Agreement or to examine or control any disposition of the Trust or
part
thereof which is directed by Employer, as applicable.
(b) The
Trustee shall have no liability for the adequacy of contributions for the
purposes of the Plans or for enforcement of the payment thereof.
(c) The
Trustee shall have no liability for the acts or omissions of Employer or
Fiduciaries.
(d) The
Trustee shall have no liability for following proper directions of Employer
or
Employer's designated Fiduciaries, or any Participant when such directions
are
made in accordance with this Trust Agreement and the Plans.
(e) During
such period or periods of time, if any, as Employer or Investment Manager
(collectively, "Fiduciary") is directing the investment and management of
Trust
assets, the Trustee shall have no obligation to determine the existence of
any
conversion, redemption, exchange, subscription or other right relating to
any
securities purchased on the directions of such Fiduciary if notice of any
such
right was given prior to the purchase of such securities. If such notice
is
given after the purchase of such securities, the Trustee shall notify such
Fiduciary. The Trustee shall have no obligation to exercise any such right
unless it is instructed to exercise such right, in writing, by the Fiduciary
within a reasonable time prior to the expiration of such right.
(f) During
such period or periods of time, if any, as a Fiduciary is directing the
investment and management of Trust assets, if such Fiduciary directs the
Trustee
to purchase securities issued by any foreign government or agency thereof,
or by
any corporation domiciled outside of the United States, it shall be the
responsibility of the Fiduciary to advise the Trustee in writing with respect
to
any laws or regulations of any foreign countries or any United States
territories or possessions which shall apply, in any manner whatsoever, to
such
securities, including, but not limited to, receipt of dividends or interest
by
the Trustee for such securities.
8.3 Indemnification.
(a) Employer
hereby agrees to indemnify and hold harmless the Trustee, its officers,
directors, employees or agents, from and against any and all liabilities,
claims
for breach of fiduciary duty or otherwise, demands, damages, costs and expenses,
including reasonable attorney’s fees, arising from (i) any act taken or omitted
by the Trustee in good faith in accordance with or due to the absence of
directions from Employer, its agents, or any Plan Participant, (ii) any act
taken or omitted by a Fiduciary other than the Trustee in breach of such
Fiduciary responsibilities under the Plan or this Agreement, and (iii) any
action taken by the Trustee pursuant to a notification of an order to purchase
or sell securities issued by Employer directly to a broker or
dealer.
(b) If
the
Trustee is named as a defendant in any lawsuit or other proceeding involving
the
Plan or the Trust for any reason including, without limitation, an alleged
breach by the Trustee of its responsibilities under this Agreement, Employer
hereby agrees to indemnify the Trustee against all liabilities, costs, and
expenses, including reasonable attorneys’ fees, incurred by the Trustee unless
the final judgment entered in the lawsuit or proceeding holds the Trustee
guilty
of negligence, willful misconduct, or a breach of fiduciary responsibility.
If
the final judgment holds the Trustee guilty of negligence, willful misconduct
or
a breach of fiduciary responsibility, Employer hereby agrees to indemnify
the
Trustee only against liability in excess of the Trustee’s allocable share of
such liability.
(c) Employer
shall have the right, but not the obligation, to conduct the defense of the
Trustee in any legal proceeding covered by this section. However, any legal
counsel selected to defend the Trustee must be acceptable to the Trustee,
and
the Trustee may elect to choose counsel, including in-house counsel, other
than
that selected by Employer. Employer may satisfy all or any part of its
obligations under this section through insurance arrangements acceptable
to the
Trustee.
ARTICLE
IX
DURATION,
TERMINATION AND REPAYMENTS TO EMPLOYER
9.1 Revocation
and Termination.
The
Trust shall not terminate until the date on which Participants are no longer
entitled to benefits pursuant to the terms of the Plan(s) unless sooner revoked
in accordance with Section 1.2 hereof. Upon termination of the Trust any
assets
remaining in the Trust shall be returned to Employer. In the event the Trust
is
terminated following the distribution of all payments and benefits called
for
herein, from the date of such termination of the Trust and until the final
distribution of the remaining Trust assets, if any, the Trustee shall continue
to have all the powers provided under this Trust Agreement that are necessary
or
desirable for the orderly liquidation and distribution of the
Trust.
9.2 Duration.
This
Trust shall continue in full force and effect for the maximum period of time
permitted by law and in any event until the expiration of twenty-one years
after
the death of the last surviving person who was living at the time of execution
hereof who at any time becomes a Participant in a Plan, unless this Trust
is
sooner terminated in accordance with this Trust Agreement.
9.3 Payments
to Employer Prior to Termination.
No part
of the Trust shall revert to Employer at any time prior to the earlier of
Employer's Insolvency, as defined in Article XI, or the satisfaction of all
liabilities under the Plans, as described in Section 9.1. Without in any
way
limiting the ability of the Employer to recover assets held by the Trust
in
accordance with the preceding sentence, Employer Securities not transferred
to
Participants in a Plan who are employees of a subsidiary of the Employer
in
satisfaction of a deferred compensation obligation under a Plan shall revert
to
the Employer (and not the subsidiary) upon termination of the
Trust.
9.4 Revocation
by All Participants.
Unless
the Trust is revocable, upon written approval of all Participants entitled
to
payment of benefits pursuant to the terms of the Plan(s), Employer may terminate
this Trust prior to the time all benefit payments under the Plan(s) have
been
made. All assets in the Trust at termination shall be returned to Employer.
The
Trustee may rely conclusively on Employer's directive that all Participants
have
consented to such revocation and termination.
ARTICLE
X
MISCELLANEOUS
10.1 Emergencies
and Delegation.
(a) In
case
of an emergency, the Trustee may act in the absence of directions from any
other
person having the power and duty to direct the Trustee with respect to the
matter involved and shall incur no liability in so acting.
(b) By
written notice to the Trustee, Employer may authorize the Trustee to act
on
matters in the ordinary course of the business of the Trust or on specific
matters upon the signature of its delegate.
10.2 Expenses
and Taxes.
(a) Employer,
or at its option, the Trust, shall quarterly pay the Trustee its expenses
in
administering the Trust and reasonable compensation for its services as the
Trustee at a rate to be agreed upon by the parties to this Trust Agreement,
based upon the Trustee's published fee schedule. However, the Trustee reserves
the right to alter this rate of compensation at any time by providing Employer
with notice of such change at least thirty (30) days prior to its effective
date. Reasonable compensation shall include compensation for any extraordinary
services or computations required, such as determination of valuation of
assets
when current market values are not published and interest on funds to cover
overdrafts. The Trustee shall have a lien on the Trust for compensation and
for
any reasonable expenses including counsel, appraisal, or accounting fees,
and
these shall be withdrawn from the Trust and may be reimbursed by
Employer.
(b) Reasonable
counsel fees, reasonable costs, expenses and charges of the Trustee incurred
or
made in the performance of its duties, expenses relating to investment of
the
Trust such as broker's commissions, stamp taxes, and similar items and all
taxes
of any and all kinds that may be levied or assessed under existing or future
laws upon or in respect to the Trust or the income thereof, and the Trustee's
charges for issuing distribution checks to Participants or their representatives
shall be paid from, and shall constitute a charge upon the Trust.
(c) Employer
shall pay any federal, state or local taxes on the Trust, or any part thereof,
and/or the income therefrom. In the event any Participant is determined to
be
subject to federal income tax on any amount under this Trust Agreement prior
to
the time of payment hereunder, the entire amount determined to be so taxable
shall, at Employer's direction, be distributed by the Trustee to such
Participant from the Trust. For the above purposes, a Participant shall be
determined to be subject to federal income tax with respect to the Trust
upon
the earlier of: (a) a final determination by the United States Internal Revenue
Service ("IRS") addressed to the Participant which is not appealed to the
courts; (b) an opinion of legal counsel designated in writing by Employer,
addressed to Employer and the Trustee, that, by reason of Treasury Regulations,
amendments to the Code, published IRS rulings, court decisions or other
substantial precedent, amounts hereunder subject the Participant to federal
income tax prior to payment. Employer shall undertake at its discretion and
at
its sole expense to defend any tax claims described herein which are asserted
by
the IRS against any Participant, including attorney fees and costs of appeal,
and shall have the sole authority to determine whether or not to appeal any
determination made by the IRS or by a lower court. Employer also agrees to
reimburse any Participant under this Section for any interest or penalties
in
respect of tax claims hereunder upon receipt of documentation
thereof.
10.3 Third
Parties.
(a) No
person
dealing with the Trustee shall be required to follow the application of purchase
money paid or money loaned to the Trustee nor inquire as to whether the Trustee
has complied with the requirements hereof.
(b) In
any
judicial or administrative proceedings, only Employer and the Trustee shall
be
necessary parties and no Participant or other person having or claiming any
interest in the Trust shall be entitled to any notice or service of process
(except as required by law). Any judgment, decision or award entered in any
such
proceeding or action shall be conclusive upon all interested
persons.
10.4 Adoption
by Affiliated Employer.
Any
affiliate of Employer (an "Affiliated Employer") may adopt one or more of
Employer's Plans with the approval of Employer, and the Affiliated Employer
shall concurrently become a party to this Trust Agreement by giving written
notice of its adoption of the Plans and this Trust Agreement to the Trustee.
Upon such written notice, the Affiliated Employer shall become a signatory
to
this Trust Agreement.
10.5 Binding
Effect; Successor Employer.
This
Trust Agreement shall be binding upon and inure to the benefit of any successor
to Employer or its business as the result of merger, consolidation,
reorganization, transfer of assets or otherwise and any subsequent successor
thereto. In the event of any such merger, consolidation, reorganization,
transfer of assets or other similar transaction, the successor to Employer
or
its business or any subsequent successor thereto shall promptly notify the
Trustee in writing of its successorship and shall promptly supply information
required by the Trustee.
10.6 Relation
to Plans.
All
words and phrases used herein shall have the same meaning as in the Plans,
and
this Trust Agreement and the Plans shall be read and construed together.
Whenever in the Plans it is provided that the Trustee shall act as therein
prescribed, the Trustee shall be and is hereby authorized and empowered to
do so
for all purposes as fully as though specifically so provided herein or so
directed by Employer.
10.7 Mediation
and Arbitration of Disputes.
If a
dispute arises under this Trust Agreement between or among Employer and the
Trustee or any Participant, except as provided in Sections 5.1(b) and 6.4,
the
parties agree first to try in good faith to settle the dispute by mediation
under the Commercial Mediation Rules of the American Arbitration Association.
Thereafter, any remaining unresolved controversy or claim arising out of
or
relating to this Agreement, or the performance or breach thereof, shall be
decided by non-binding arbitration in accordance with the Commercial Arbitration
Rules of the American Arbitration Association and Title 9 of California Code
of
Civil Procedure Sections 1280 et seq. The sole arbitrator shall be a retired
or
former Judge associated with the American Arbitration Association. Each party
shall bear its own costs, attorney's fees and its share of arbitration fees.
The
Alternate Dispute Resolution Agreement in this Agreement does not constitute
a
waiver of the parties' rights to a judicial forum in instances where arbitration
would be void under applicable law, and does not preclude Bank from exercising
it's rights to interplead the funds of the Account at the cost of the
Account.
10.8 Partial
Invalidity.
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. In the event of any such holding, Employer and the Trustee and, if
applicable, Participants, will immediately amend this Trust Agreement as
necessary to remedy any such defect.
10.9 Construction.
This
Trust Agreement shall be governed by and construed in accordance with the
laws
of California.
10.10 Notices.
Any
notice, report, demand or waiver required or permitted hereunder shall be
in
writing, shall be deemed received upon the date of delivery if given personally
or, if given by mail, upon the receipt thereof, and shall be given personally
or
by prepaid registered or certified mail, return receipt requested, addressed
to
Employer and the Trustee as listed below in Article XII; if to a Participant,
to
the last mailing address provided to the Trustee with respect to such
individual, provided, however, that if any party or his or its successor
shall
have designated a different address by written notice to the other parties,
then
to the last address so designated.
ARTICLE
XI
DISTRIBUTIONS
IN THE EVENT OF INSOLVENCY OF EMPLOYER
11.1 Trustee
and Employer Responsibility upon notice of Employer's Insolvency:
(a) Insolvency.
The
Trustee shall cease payment of benefits to Participants if Employer is
Insolvent. Employer shall be considered "Insolvent" for purposes of this
Trust
Agreement if (i) Employer is unable to pay its debts as they become due,
or (ii)
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 1.4 hereof,
the principal and income of the Trust shall be subject to claims of general
creditors of Employer under federal and state law as set forth
below.
(1) The
Board
of Directors and the Chief Executive Officer of Employer shall have the duty
to
inform the Trustee in writing of Employer's Insolvency. If a person claiming
to
be a creditor of Employer alleges in writing to the Trustee that Employer
has
become Insolvent, the Trustee shall determine whether Employer is Insolvent
and,
pending such determination, the Trustee shall discontinue payment of benefits
to
Participants. If Trustee is unable to obtain information sufficient to ascertain
Insolvency, the Trustee may seek instructions of a court of law or submit
the
matter for arbitration before the American Arbitration Association in accordance
with paragraph (c) below or interplead the Trust Assets at the expense of
the Trust.
(2) Unless
the Trustee has actual knowledge of Employer's Insolvency, or has received
written notice from Employer or a person claiming to be a creditor alleging
that
Employer is Insolvent, the Trustee shall have no duty to inquire whether
Employer is Insolvent. The Trustee may in all events rely on such evidence
concerning Employer's solvency as may be furnished to the Trustee and that
provides the Trustee with a reasonable basis for making a determination
concerning Employer's solvency.
(3) If
at any
time the Trustee has determined that Employer is Insolvent, the Trustee shall
discontinue payments to Participants and shall hold the assets of the Trust
for
the benefit of Employer's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of Participants to pursue their rights
as
general creditors of Employer with respect to benefits due under the Plan(s)
or
otherwise.
(4) The
Trustee shall resume the payment of benefits to Participants in accordance
with
Section 4.2 of this Trust Agreement only after the Trustee has determined
that
Employer is not Insolvent (or is no longer Insolvent).
(5)
Notwithstanding
anything in the Plan to the contrary, in the event of the Insolvency of the
Employer or a subsidiary who maintains a Plan that participates in this Trust,
Employer Securities held by the Trust shall be subject to the claims of the
creditors of the Employer and any such subsidiary.
(c) Determination
of Insolvency.
Upon
receipt of the aforesaid written notice of Employer's Insolvency and if the
Trustee is not able to determine Employer’s solvency or Insolvency, the Trustee
shall notify Employer, and Employer, within thirty (30) days of receipt of
such
notice, shall engage an arbitrator (the "Arbitrator") acceptable to the Trustee,
from the American Arbitration Association to determine Employer's solvency
or
Insolvency. Employer shall cooperate fully and assist the Arbitrator, as
may be
requested by the Arbitrator, in such determination and shall pay all costs
relating to such determination. The Arbitrator shall notify Employer and
the
Trustee separately by registered mail of its findings. If the Arbitrator
determines that Employer is solvent or if once found Insolvent Employer is
no
longer Insolvent, the Trustee shall resume holding the Trust assets for the
benefit of the Participants and may make any distributions called for under
this
Trust Agreement, including any amounts which should have been distributed
during
the period when the Trustee suspended distributions in response to a notice
of
Employer's Insolvency, including earnings (or losses) on such suspended
distributions. If the Arbitrator determines that Employer is Insolvent or
is
unable to make a conclusive determination of Employer's Insolvency, the Trustee
shall continue to retain the assets of the Trust until Employer's status
of
solvency or Insolvency is decided by a court of competent jurisdiction or
it
distributes all or a portion of the Trust assets to any duly appointed receiver,
trustee in bankruptcy, custodian or to Employer's general creditors, but
only as
such distribution is ordered by a court of competent jurisdiction.
The
Trustee shall have no liability for relying upon the determination of the
Arbitrator as to Employer's solvency or Insolvency.
(d) If
a
court of competent jurisdiction orders distribution of only part of the Trust
assets and does not specify the manner in which Trust assets are to be
liquidated, the Trustee shall liquidate Trust assets as follows:
(i) If
such
liquidation is ordered prior to a Change in Control, as directed by Employer;
or
(ii) If
such
liquidation is ordered after a Change in Control or upon Insolvency of Employer,
as determined by the Trustee in its sole and absolute discretion.
If
Employer fails to provide instructions under subparagraph (i) above, as to
the
manner of liquidation within five (5) business days prior to the date the
Trustee is required to comply with the court's order, the Trustee shall
liquidate and shall have the authority to order any Investment Manager to
liquidate the Trust assets in such manner as the Trustee shall determine
in its
sole and absolute discretion. The Trustee shall not be liable for any damages
resulting from the Trustee's exercise in good faith of its power to liquidate
assets as provided in this paragraph.
(e) Provided
that there are sufficient assets, if the Trustee discontinues the payment
of
benefits from the Trust pursuant to subsection (b)(3) hereof and subsequently
resumes such payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Participants under the
terms
of the Plan(s) for the period of such discontinuance, less the aggregate
amount
of any payments made to Participants by Employer in lieu of the payments
provided for hereunder during any such period of discontinuance of which
the
Trustee has actual knowledge.
(f) Insolvency
of Subsidiary Corporation.
With
respect to any assets contributed to this Trust for the benefit of Participants
who are employees or service providers of a corporation which is a subsidiary
corporation of the Employer, such assets shall also be subject to the claims
of
creditors of the subsidiary corporation and the provisions of this
Section 11.1 shall be applied to such assets if the subsidiary corporation
is determined to be Insolvent.
Nothing
in this Trust Agreement shall in any manner diminish any right of a Participant
to pursue his or her rights as a general creditor of Employer with regard
to
payments under the Trust or otherwise.
[CONTINUED
ON FOLLOWING PAGE]
ARTICLE
XII
EFFECTIVE
DATE
The
effective date of this amended and restated Trust Agreement shall be January
1,
2005, unless as otherwise required by applicable law.
“Trustee” “Employer”
UNION
BANK OF CALIFORNIA, N.A. ITLA
CAPITAL CORPORATION
Address:
▇▇▇ ▇
▇▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇
▇▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇, ▇▇
▇▇▇▇▇
By:
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By:
/s/ ▇▇▇▇▇▇▇ ▇. Lipscomb______
Vice
President Chairman
of the
Compensation Committee
of
the Board of
Directors
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. Lipscomb___________
(typed
or printed
name) (typed
or
printed name)
Dated: 6/29/06
Dated:
6/29/06
By: /s/
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ _______ By:
_________________________
Vice
President
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
____________________________
(typed
or printed name)
(typed
or
printed name)
Dated:
6/29/06
Dated:_______________________
EXHIBIT
A
The
following nonqualified deferred compensation plans (the “Plans”) maintained by
ITLA Capital Corporation and funds held pursuant to the Trust Agreement are
intended to be used to pay benefits under such Plans:
| · |
The
ITLA Capital Corporation Supplemental Executive Retirement
Plan
|
| · |
The
ITLA Capital Corporation Consolidated Nonqualified Deferred
Compensation
Plan
|
| · |
ITLA
Capital Corporation Salary Continuation
Plan.
|
For
purposes of applying the terms of the Agreement with respect to the funding
of
benefits under the ITLA Capital Corporation Salary Continuation Plan, the
term
“Change in Control” shall be defined as set forth in Section 1.1 of the ITLA
Capital Corporation Salary Continuation Plan.