EXHIBIT 10.45
TRUST AGREEMENT FOR THE HEMAGEN STOCK OWNERSHIP PLAN
TRUST AGREEMENT
BETWEEN
HEMAGEN DIAGNOSTICS, INC.
AND
XXXXXXX X. XXXXX AND XXXXXXX X. XXXXX
FOR THE
HEMAGEN DIAGNOSTICS, INC.
EMPLOYEE STOCK OWNERSHIP PLAN TRUST
4
Table of Contents
Page
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SECTION 1. CREATION OF TRUST........................................................2
SECTION 2. INVESTMENT OF TRUST FUND AND ADMINISTRATIVE POWERS OF THE TRUSTEES.......2
SECTION 3. COMPENSATION AND INDEMNIFICATION OF TRUSTEESS AND PAYMENT OF EXPENSES
AND TAXES................................................................6
SECTION 4. RECORDS AND VALUATION....................................................7
SECTION 5. CHANGE OF TRUSTEES.......................................................7
SECTION 6. MISCELLANEOUS............................................................7
i
This TRUST AGREEMENT dated as of October 1, 2003 between HEMAGEN
DIAGNOSTICS, INC. (hereinafter called the "Company"), and XXXXXXX X. XXXXX
and XXXXXXX X. XXXXX (hereinafter called the "Trustees").
WITNESSETH THAT:
WHEREAS, effective October 1, 2003, the Company approved and adopted an
employee stock ownership plan for the benefit of its employees
(hereinafter called the "Plan"); and
WHEREAS, the Company has authorized the execution of this Trust Agreement
and has appointed Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxx as Trustees of the
Trust Fund created pursuant to the Plan; and
WHEREAS, Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxx have agreed to act as
Trustees and to hold and administer the assets of the Plan in accordance
with the terms of this Trust Agreement;
NOW, THEREFORE, the Company and the Trustees agree as follows:
Section 1 Creation of Trust.
1.1 Trustees. Xxxxxxx X. Xxxxx and Xxxxxxx X. Xxxxx shall be Trustees of
the Trust Fund created in accordance with and in furtherance of the Plan,
and shall serve as Trustees until their removal or resignation in
accordance with Section 5.
1.2 Trust Fund. The Trustees hereby agree to accept contributions from the
Employer as defined in the Hemagen Diagnostics, Inc. Employee Stock
Ownership Plan. All such property and contributions, together with income
thereon and increments thereto, shall constitute the "Trust Fund" to be
held in accordance with the terms of the Trust Agreement.
1.3 Incorporation of Plan. An instrument entitled "Hemagen Diagnostics,
Inc. Employee Stock Ownership Plan" is incorporated herein by reference,
and this Trust Agreement shall be interpreted consistently with that Plan.
All words and phrases defined in that Plan shall have the same meaning
when used in this Trust Agreement.
1.4 Name. The name of this trust shall be "Hemagen Diagnostics, Inc.
Employee Stock Ownership Plan Trust."
1.5 Nondiversion of Assets. In no event shall any part of the corpus or
income of the Trust Fund be used for, or diverted to, purposes other than
for the exclusive benefit of the Participants and their Beneficiaries
prior to the satisfaction of all liabilities under the Plan, except to the
extent that assets may be returned to the Employer in accordance with the
Plan where the Plan fails to qualify initially under Section 401(a) of the
Code, or where they are attributable to contributions made by mistake of
fact or conditioned upon their deductibility.
Section 2. Investment of Trust Fund and Administrative Powers of the Trustees.
2.1 Stock and Other Investments. The basic investment policy of the Plan
shall be to invest primarily in Stock of the Employer for the exclusive
benefit of the Participants and their Beneficiaries. The Trustees shall
have full and complete investment authority and responsibility with
respect to the purchase, retention, sale, exchange, and pledge of Stock
and the payment of Stock Obligations, if any, in accordance with the
instructions from the Plan Administrator or the Compensation Committee of
the Board of Directors. The Trustees shall invest, or keep invested, all
or a portion of the Trust Fund in Stock, and shall pay Stock Obligations,
if any, out of assets of the Trust Fund as instructed from time to time by
the Compensation Committee of the Board of Directors of the Company. The
Trustees shall invest any balance of the Trust Fund (the "Investment
Fund") in such other property as the Trustees, in their sole discretion,
shall deem advisable, subject to any delegation of such investment
responsibility pursuant to Section 2.2.
In connection with the acquisition of Stock, the Trustees may purchase
newly issued or outstanding Stock
from an Employer or any other holders of Stock, including Participants,
Beneficiaries, and Plan fiduciaries. All purchases and sales of Stock
shall be made by the Trustees at fair market value in good faith and in
accordance with any applicable requirement under ERISA. Such purchases may
be made with assets of the Trust Fund, with funds borrowed for this
purpose (with or without guarantees of repayment to the lender by an
Employer), or by any combination of the foregoing.
Notwithstanding any other provision of this Trust Agreement or the Plan,
the Trustees shall not make any purchase, sale, exchange, investment,
pledge, valuation, or loan, or take any other action involving those
assets for which they are responsible which (i) is inconsistent with the
policy of the Plan and Trust, (ii) is inconsistent with the prudence and
diversification requirements set forth in Sections 404(a)(1)(B) and (C) of
ERISA (to the extent such requirements apply to an employee stock
ownership plan and trust), (iii) is prohibited by Section 406 or 407 of
ERISA, or (iv) would impair the qualification of the Plan or the exemption
of the Trust under Sections 401 and 501 of the Code.
2.2 Delegation of Investment Responsibility. The Trustees may segregate
any portion or all of the Investment Fund into one or more separate
accounts for each of which full investment responsibility will be
delegated to an investment manager appointed in such notice pursuant to
Section 402(c)(3) of ERISA (hereinafter a "Manager"). For any separate
account where the Trustees are to maintain custody of the assets, the
Trustees and the Manager shall agree upon procedures for the transmittal
of investment instructions from the Manager to the Trustees, and the
Trustees may provide the Manager with such documents as may be necessary
to authorize the Manager to effect transactions directly on behalf of the
segregated account.
Further, the Trustees may segregate any portion or all of the Investment
Fund into one or more separate accounts for each of which full investment
responsibility will be delegated to an insurance company through one or
more group annuity contracts, deposit administration contracts, or similar
contracts, which may provide for investments in any commingled separate
accounts established under such contracts. An insurance company shall be a
Manager with respect to any amounts held under such a contract except to
the extent the insurer's assets are not deemed assets of the Plan and
Trust Fund pursuant to Section 401(b)(2) of ERISA. The allocation of
amounts held under such a contract among the insurer's general account and
one or more individual or commingled separate accounts shall be determined
by the Company except as otherwise agreed by the Company and the insurer.
Any Manager shall have all of the powers given to the Trustees pursuant to
Section 2.3 with respect to the portion of the Trust Fund committed to its
investment discretion and control. The Trustees shall be responsible for
the safekeeping of any assets which remain in their custody.
2.3 Trustees Powers. In addition to and not by way of limitation upon the
fiduciary powers granted to them by law, the Trustees shall have the
following specific powers, subject to the limitations set forth in Section
2.1:
2.3.1 to receive, hold, manage, invest and reinvest the money or
other property which constitutes the Trust Fund, without distinction between
principal and income;
2.3.2 to hold funds uninvested temporarily without liability for
interest thereon, and to deposit funds in one or more savings or similar
accounts with any banks and savings and loan associations which are insured by
an instrumentality of the federal government;
2.3.3 to invest or reinvest the whole or any portion of the money or
other property which constitutes the Trust Fund in such common or preferred
stocks, investment trust shares, mutual funds, commingled trust funds,
partnership interests, bonds, notes, or other evidences of indebtedness, and
real and personal property as the Trustees in their absolute judgment and
discretion may deem to be for the best interests of the Trust Fund, regardless
of nondiversification to the extent that such nondiversification is clearly
prudent, and regardless of whether any such investment or property is authorized
by law regarding the investment of trust funds, of a wasting asset nature,
temporarily nonincome producing, or within or without the United States;
2.3.4 to invest in common and preferred stocks, bonds, notes, or
other obligations of any corporation or business enterprise in which an Employer
or its owners may own an interest;
2.3.5 to exchange any investment or property, real or personal, for
other investments or properties at such time and upon such terms as the Trustees
shall deem proper;
2.3.6 to sell, transfer, convey or otherwise dispose of any
investment or property, real or personal, for cash or on credit, in such manner
and upon such terms and conditions as the Trustees shall deem advisable, and no
person dealing with the Trustees shall be under any duty to inquire as to the
validity, expediency, or propriety of any such sale or as to the application of
the purchase money paid to the Trustees;
2.3.7 to hold any investment or property in the name of the
Trustees, with or without the designation of any fiduciary capacity, or in name
of a nominee, or unregistered, or in such other form that title may pass by
delivery; provided, however, that the Trustees' records always show that such
investment or property belongs to the Trust Fund and the Trustees shall not be
relieved hereby of their responsibility to maintain safe custody of the Trust
Fund;
2.3.8 to organize one or more corporations to hold, manage, or
liquidate any property, including real estate, owned or acquired by the Trust
Fund if in the sole discretion of the Trustees the organization of such
corporation or corporations is for the best interest of the Trust;
2.3.9 to extend the time for payment of, to modify, to renew, or to
release security from any mortgage, note or other evidence of indebtedness, or
to take advantage of or waive any default; to foreclose mortgages and bid in
property under foreclosure or to take title to property by conveyance in lieu of
foreclosure, either with or without the payment of additional consideration;
2.3.10 to vote in person or by proxy all stocks and other securities
having voting privileges; to exercise or refrain from exercising any option or
privilege with respect to stocks and other securities, including any right or
privilege to subscribe for or otherwise to acquire stocks and other securities;
or to sell any such right or privilege; to assent to and join in any plan of
refinance, merger, consolidation, reorganization or liquidation of any
corporation or other enterprise in which this Trust may have an interest, to
deposit stocks and other securities with any committee formed to effectuate the
same, to pay any expense incidental thereto, to exchange stocks and other
securities for those which may be issued pursuant to any such plan, and to
retain as an investment the stocks and other securities received by the
Trustees; and to deposit any investment in a voting trust; notwithstanding the
preceding, Participants and Beneficiaries shall be entitled to direct the manner
in which Stock allocated to their respective accounts are to be voted on all
matters. All Stock which has been allocated to Participant's accounts for which
the Trustees have received no written direction and all unallocated Employer
securities will be voted by the Trustees in a manner determined by the Trustees
to be solely in the interests of the Participants and Beneficiaries. Whenever
such voting rights are to be exercised, the Employer and the Trustees shall see
that all Participants and Beneficiaries are provided with adequate opportunity
to deliver their instructions to the Trustees regarding voting of Stock
allocated to their accounts. The instructions of the Participants and
Beneficiaries with respect to the voting of allocated shares hereunder shall be
confidential;
2.3.11 to abandon any property, real or personal, which the Trustees
shall consider to be worthless or not of sufficient value to warrant its keeping
or protecting; to abstain from the payment of taxes, water rents, assessments,
repairs, maintenance, and upkeep of any such property; to permit any such
property to be lost by tax sale or other proceedings, and to convey any such
property for a nominal consideration or without consideration;
2.3.12 to borrow money from an Employer or from others and to enter
into installment contracts, for the purchase of Stock upon such terms and
conditions and at such reasonable rates of interest as the Trustees may deem to
be advisable, to issue promissory notes as Trustees to evidence such debt, to
secure the payment of such notes by pledging any property of the Trust Fund, and
to authorize the holders of any such notes to pledge them to secure obligations
of the holders and in connection therewith to repledge any
assets of the Trust as security therefor; provided that, with respect to any
extension of credit to the Trust involving, as a lender or guarantor, an
Employer or another "disqualified person" within the meaning of Section
4975(e)(2) of the Code as follows:
(a) each loan or installment contract is primarily for the benefit
of Participants and Beneficiaries of the Plan;
(b) any interest on a loan or installment contract does not exceed a
reasonable rate;
(C) the proceeds of any loan shall be used only to acquire Stock, to
repay the loan, or to repay a previous loan meeting these conditions, and the
subject of any installment contract shall be only the Trust's purchase of Stock;
(d) any collateral pledged to a creditor by the Trustees shall
consist only of the assets purchased with borrowed funds or received in
accordance with an installment contract and the creditor shall have no recourse
against the Trust Fund except with respect to the collateral (although the
creditor may have recourse against an Employer as guarantor);
(e) payments with respect to a loan or installment contract shall be
made only from those amounts contributed by the Employer to the Trust Fund, from
amounts earned on such contributions, and from cash dividends received on
unallocated Stock held by the Trust as collateral for such an obligation; and
(f) upon the payment of any portion of balance due on a loan or upon
any installment payment, a proportionate part of any assets originally pledged
as collateral for such indebtedness shall be released from encumbrance in
accordance with Section 10.1 of the Plan;
2.3.13 to manage and operate any real property which shall at any
time constitute an asset of the Trust Fund; to make repairs, alterations, and
improvements thereto; to insure such property against loss by fire or other
casualty; to lease or grant options for the sale of such property, which lease
or option may be for a period of time which may extend beyond the life of this
Trust; and to take any other action or enter into any other contract respecting
such property which is consistent with the best interests of the Trust;
2.3.14 to pay any and all reasonable and normal expenses incurred in
connection with the exercise of any power, right, authority or discretion
granted herein, and, upon prior notice to the Company, to employ and compensate
agents, investment counsel, custodians, actuaries, attorneys, and accountants in
such connection;
2.3.15 to employ and consult with any legal counsel, who also may be
counsel to an Employer or the Plan Administrator, with respect to the meaning or
construction of this Trust Agreement, the extent of the Trustees' obligations
and duties hereunder, and whether the Trustees should take or decline to take a
particular action hereunder, and the Trustees shall be fully protected with
respect to any action taken or omitted by them in good faith pursuant to such
advice;
2.3.16 to defend any action or proceeding instituted against the
Trust Fund, to institute any action on behalf of the Trust Fund, and to
compromise or submit to arbitration any dispute concerning the Trust Fund;
2.3.17 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;
2.3.18 to commingle the Trust Fund created pursuant hereto, in whole
or in part, in a single trust with all or any portion of any other trust fund,
assigning an undivided interest to each such commingled trust fund, provided
that such commingled trust is itself exempt from taxation pursuant to Section
501(a) of the Code, or its successor Section; and provided further that the
trust agreement governing such commingled trust shall be deemed incorporated by
reference in the Plan;
2.3.19 where two or more trusts governed by this Trust Agreement
have an undivided interest in any property, to credit the income from such
property to such trusts in proportion to their undivided interests, and when non
pro rata distributions of property or money are made from such trusts, to make
appropriate adjustments to the undivided fractional interests of such trusts;
2.3.20 to invest all or any portion of the Trust Fund in one or more
group annuity contracts, deposit administration contracts, and other such
contracts with insurance companies, including any commingled separate accounts
established under such contracts;
2.3.21 generally, with respect to all cash, stocks and other
securities, and property, both real and personal, received or held in the Trust
Fund by the Trustees, to exercise all the same rights and powers as are or may
be lawfully exercised by persons owning cash, or stocks and other securities, or
such property in their own right; and to do all other acts, whether or not
expressly authorized, which they may deem necessary or proper for the protection
of the Trust Fund; and
2.3.22 whenever more than two persons shall qualify to act as
co-Trustees, to exercise and perform every power (including discretionary
powers), authority or duty by the concurrence of a majority of them the same
effect as if all had joined therein, except that the unanimous vote of such
persons shall be necessary to determine the number (one or more) and identity of
persons who may sign checks, make withdrawals from financial institutions, have
access to safe deposit boxes, or direct the sale of trust assets and the
disposition of the proceeds.
Section 3. Compensation and Indemnification of Trustees and Payment of
Expenses and Taxes.
3.1 Fees and Expenses from Fund. As long as the Trustees are also
employees of the Company, no fees shall be paid to the Trustees. In the
event a corporate Trustee is appointed pursuant to Section 6, the Trustees
shall be paid fees in accordance with the Trustees' fee schedule as in
effect from time to time in consideration for rendering services pursuant
to this Trust Agreement. Fee changes resulting in fee increases shall be
effective upon not less than 30 days' notice to the Company. The Trustees
shall be reimbursed for any reasonable expenses, including reasonable
attorneys' fees, incurred in the administration of the Trust created
hereby. Fees and expenses shall be allocated to Participant Accounts, if
any, unless paid directly by the Employer. All compensation and expenses
of the Trustees shall be paid out of the Trust Fund or by the Employer as
specified in the Plan. If and to the extent the Trust Fund shall not be
sufficient, such compensation and expenses shall be paid by the Employer
upon demand.
3.2 Indemnification. Notwithstanding any other provision of this Trust
Agreement, any individual designated as Trustees hereunder shall be
indemnified and held harmless by the Employer to the fullest extent
permitted by law against any and all costs, damages, expenses and
liabilities including, but not limited to attorneys' fees and
disbursements reasonably incurred by or imposed upon such individual in
connection with any claim made against the individual or in which the
individual may be involved by reason of being, or having been, a Trustee
hereunder, to the extent such amounts are not satisfied by insurance
maintained by the Employer, except liability which is adjudicated to have
resulted from the gross negligence or willful misconduct of the Trustees
by reason of any action so taken. Further, any corporate Trustee and its
officers, directors and agents may be indemnified and held harmless by the
Employer to the fullest extent permitted by law against any and all costs,
damages, expenses and liabilities including, but not limited to attorneys'
fees and disbursements reasonably incurred by or imposed upon such persons
and/or corporation in connection with any claim made against it or them or
in which it or them may be involved by reason of its being, or having
been, a Trustee hereunder as may be agreed between the Employer and such
Trustee, except liability which is adjudicated to have resulted from the
gross negligence or willful misconduct of the Trustees by reason of any
action so taken.
3.3 Expenses. All expenses of administering this Trust and the Plan
incurred by the Trustees shall be paid by the Trustees from the Trust Fund
to the extent such expenses shall not have been assumed by the Employer.
3.4 Taxes. All taxes of any kind that may be levied or assessed upon the
Trust Fund, its income or
assets, shall be paid from the Trust Fund, but the Trustees shall not be
obliged to pay such tax so long as they shall contest the validity of such
levy or assessment upon the advice of counsel.
Section 4. RECORDS AND VALUATION.
4.1 Records. The Trustees, and any investment manager appointed pursuant
to Section 2.2, shall maintain accurate and detailed records and accounts
of all investments, receipts, disbursements and other transactions made by
them with respect to the Trust Fund, and all accounts, books and records
relating thereto shall be open at all reasonable time to inspection and
audit by the Employer.
4.2 Valuation. From time to time, but at least annually as of the last day
of each Plan Year, the Trustees shall prepare a balance sheet of the
Investment Fund in accordance with Section 7.2 of the Plan and shall
deliver copies of the balance sheet to the Employer.
Section 5. CHANGE OF TRUSTEES.
The Company may at any time remove any person or entity serving as a
Trustee hereunder by giving to such person or entity written notice of
removal and, if applicable, the name and address of the successor Trustee.
Any person or entity serving as a Trustee hereunder may resign at any time
by giving written notice to the Company. Any such removal or resignation
shall take effect within 30 days after notice has been given by the
Trustee or by the Company, as the case may be. Within those 30 days, the
removed or resigned Trustee shall transfer, pay over and deliver any
portion of the Trust Fund in its possession or control (less an
appropriate reserve for any unpaid fees, expenses, and liabilities) and
all pertinent records to the successor or remaining Trustee; provided,
however, that any assets which are invested in a collective fund or in
some other manner which prevents their immediate transfer shall be
transferred and delivered to the successor Trustee as soon as may be
practicable. Thereafter, the removed or resigned Trustee shall have no
liability for the Trust Fund or for its administration by the successor or
remaining Trustee, but shall render an accounting to the Plan
Administrator of its administration of the Trust Fund to the date on which
its Trusteeship shall have been terminated. The Company may also, upon 30
days' notice to each person currently serving as a Trustee, appoint one or
more persons to serve as co-trustees hereunder.
Section 6. MISCELLANEOUS.
6.1 Right to Amend. This Trust Agreement may be amended from time to time
by an instrument executed by the Company; provided, however, that any
amendment affecting the powers, duties or liabilities of the Trustees must
be approved by the Trustees, and provided, further, that no amendment may
divert any portion of the Trust Fund to purposes other than the exclusive
benefit of the Participants and their Beneficiaries prior to the
satisfaction of all liabilities for benefits. Any amendment shall apply to
the Trust Fund as constituted at the time of the amendment as well as to
that portion of the Trust Fund which is subsequently acquired.
6.2 Compliance with ERISA. In the exercise of their powers and the
performance of their duties, the Trustees shall act in good faith and in
accordance with the applicable requirements under ERISA. Except as may be
otherwise required by ERISA, the Trustees shall not be required to furnish
any bond in any jurisdiction for the performance of their duties and, if a
bond is required despite this provision, no surety shall be required on
them.
6.3 Nonresponsibility for Funding. The Trustees shall be under no duty to
enforce the payment of any contributions and shall not be responsible for
the adequacy of the Trust Fund to satisfy any obligations for benefits,
expenses, and liabilities under the Plan. Reports. The Trustees shall file
any report which they are required by law to file with any governmental
authority with respect to this Trust, and the Plan Administrator shall
furnish to the Trustees whatever information is necessary to prepare the
report.
6.4 Dealings with Trustees. Persons dealing with the Trustees, including
but not limited to banks,
brokers, dealers, and insurers, shall be under no obligation to inquire
concerning the validity of anything which the Trustees purport to do, nor
need any person see to the proper application of any money paid or any
property transferred upon the order of the Trustees or to inquire into the
Trustees' authority as to any transaction.
6.6 Limitation Upon Responsibilities. The Trustees shall have no
responsibilities with respect to the Plan or Trust other than those
specifically enumerated or explicitly allocated to them under this Trust
Agreement or the provisions of ERISA. All other responsibilities are
retained and shall be performed by one or more of the Employer, the Plan
Administrator, and such advisors or agents as they choose to engage.
The Trustees may execute any of the trusts or powers hereof and perform
any of their duties by or through attorneys, agents, receivers or
employees and shall not be answerable for the conduct of the same if
chosen with reasonable care and shall be entitled to advice of counsel
concerning all matters of trust hereof and the duties hereunder, and may
in all cases pay such reasonable compensation to all such attorneys,
agents, receivers and employees as may reasonably be employed in
connection with the trusts hereof. The Trustees may act upon the opinion
or advice of any attorney (who may be the attorney for the Trustees or the
attorney for the Company), approved by the Trustees in the exercise of
reasonable care. The Trustees shall not be responsible for any loss or
damage resulting from any action or non-action in good faith in reliance
upon such opinion or advice.
The Trustees shall be protected in acting upon any notice, request,
consent, certificate, order, affidavit, letter, telegram or other paper or
document believed to be genuine and correct and to have been signed or
sent by the proper person or persons.
No provision of this Agreement shall require the Trustees to expend or
risk their own funds or otherwise incur any financial liability in the
performance of any of their duties hereunder, or in the exercise of any of
their rights or powers, if the Trustees shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to them.
6.7 Successor Trustees. This Trust Agreement shall apply to any person who
shall be appointed to succeed the person currently appointed as the
Trustees; and any reference herein to the Trustees shall be deemed to
include any one or more individuals or corporations or any combination
thereof who or which shall at any time act as a co-Trustee or as the sole
Trustee.
6.8 Governing State Law. This Trust Agreement shall be interpreted in
accordance with the laws of the State of Maryland to the extent those laws
may be applicable under the provisions of ERISA.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ATTEST: HEMAGEN DIAGNOSTICS, INC.
/s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxx
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ATTEST: TRUSTEES
/s/ Xxxxxxx Xxxxx /s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
/s/ Xxxxxxx Xxxxx /s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
