1
Exhibit 4.2
PAINEWEBBER, INC. SAVINGS INVESTMENT PLAN TRUST AGREEMENT
THIS AGREEMENT is made effective as of the first day of July, 1996 between
PAINEWEBBER, INC., a Delaware corporation, of New York City, New York, herein
referred to as the "Company", and THE NORTHERN TRUST COMPANY, an Illinois
corporation, of Chicago, Illinois, as Trustee and constitutes a restatement into
a trust agreement known as the PaineWebber, Inc. Savings Investment Plan Trust
Agreement of the PaineWebber, Inc. Savings Investment Plan Trust which was
heretofore made by the Company and its Subsidiaries and under which the Trustee
is accepting appointment as successor trustee.
The Company shall appoint the Administrative Committee as the fiduciary
which has the responsibility for administering the Plan and the Investment
Committee as the fiduciary which has the responsibility for Plan investments.
The Trust Fund shall consist of all assets held by the Trustee as of the
date of this agreement, all investments and reinvestments thereof and all
additions thereto by way of contributions, earnings and increments, and shall be
held upon the following terms:
ARTICLE ONE: DEFINITIONS
For the purposes of this agreement:
1.1 "Administrative Committee" means the committee as constituted from
time to time which has the responsibility for administering the Plan and shall
be deemed for purposes of ERISA to be the Plan administrator and the named
fiduciary for Plan administration;
1.2 "Beneficiary" means a person(s) or entity designated to receive a
benefit under the Plan after the death of a Participant;
1.3 "Code" means the Internal Revenue Code of 1986, as amended from time
to time and the applicable regulations thereunder;
1.4 "Company" means PaineWebber, Inc. and any corporation which is the
successor thereto;
1.5 "Company Stock" means common stock of the Company;
1.6 "Company Stock Investment Fund" means any Investment Fund composed of
investments in Company Stock as provided in ARTICLE FOUR;
2
1.7 "Custodial Agent" means one or more persons or entities designated by
the Investment Committee to maintain custody of assets of a Separate Investment
Account pursuant to 3.1(c);
1.8 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and the applicable regulations issued thereunder;
1.9 "Investment Adviser" means an Investment Manager or an Investment
Trustee to whom the Investment Committee has delegated investment responsibility
for a Separate Account or the Investment Committee with respect to any assets
for which the Investment Committee has investment responsibility;
1.10 "Investment Committee" means the committee as constituted from time
to time which has the responsibility for allocating the assets of the Trust Fund
among the Separate Accounts and any Trustee Investment Accounts, for monitoring
the diversification of the investments of the Trust Fund, for determining the
propriety of investment of the Trust Fund in foreign securities and of
maintaining the custody of foreign investments abroad, for assuring that the
Plan does not violate any provisions of ERISA limiting the acquisition or
holding of "employer securities" or "employer real property" and for the
appointment and removal of Investment Advisers and shall be deemed for purposes
of ERISA to be named fiduciary for Plan investments;
1.11 "Investment Fund" shall mean each of the investment funds
established pursuant to ARTICLE FOUR; any of such Investment Funds may be
composed of one or more Separate Accounts and Trustee Investment Accounts
designated by the Investment Committee;
1.12 "Investment Manager" means an investment manager registered as an
investment adviser under the Investment Advisers Act of 1940, a bank as defined
in that Act or an insurance company qualified to manage, acquire or dispose of
any asset of the Trust Fund, which is appointed by the Investment Committee to
manage a Separate Investment Account;
1.13 "Investment Trustee" means the trustee appointed by the Investment
Committee to manage a Separate Investment Trust Account;
1.14 "Participant" means a person who is a Participant, or is treated as a
Participant, in the Plan in accordance with its terms;
1.15 "Plan" means the PaineWebber, Inc. Savings Investment Plan (SIP);
1.16 "Separate Account" means a Separate Investment Account, a Separate
Investment Trust Account or a Separate Insurance Contract Account;
2
3
1.17 "Separate Insurance Contract Account" means assets of the Trust Fund
allocated by the Investment Committee to a Separate Account for investment in
insurance contracts directed by the Investment Committee;
1.18 "Separate Investment Account" means assets of the Trust Fund
allocated by the Investment Committee to a Separate Account to be managed by an
Investment Manager or the Investment Committee;
1.19 "Separate Investment Trust Account" means assets of the Trust Fund
allocated by the Investment Committee to a Separate Account to be managed by an
Investment Trustee;
1.20 "Subsidiary" means a subsidiary or affiliate of the Company;
1.21 "Subtrust" means assets of a Separate Investment Account which are
held by a Subtrustee pursuant to an agreement which the Investment Committee has
approved and directed the Trustee to enter into;
1.22 "Subtrustee" means the trustee appointed by the Investment Committee
to act as trustee of a Subtrust;
1.23 "Trust Fund" means all assets subject to this agreement;
1.24 "Trustee" means THE NORTHERN TRUST COMPANY and any successor to it as
trustee or trustees of the Trust Fund under this agreement; and
1.25 "Trustee Investment Account" means assets of the Trust Fund for which
investment responsibility has been allocated by the Investment Committee to the
Trustee with the written consent of the Trustee.
ARTICLE TWO: DISTRIBUTIONS
The Trustee shall make distributions from the Trust Fund to such persons,
in such amounts (but not exceeding the then value of the Trust Fund), at such
times and in such manner as the Administrative Committee or its designee shall
from time to time direct pursuant to a separate Benefit Payment Agency Agreement
executed by the Company, the Administrative Committee and the Trustee. The
Trustee shall have no responsibility to ascertain whether any direction received
by the Trustee from the Administrative Committee or its designee in accordance
with the preceding sentence is proper and in compliance with the terms of the
Plan or to see to the application of any distribution, provided, however, that
in the event the Relationship Manager of the Trustee assigned to the PaineWebber
Retirement Savings Trust has actual knowledge that a direction received from the
Administrative Committee in writing is not in compliance with the terms of the
Plan, the Trustee shall promptly notify the Administrative Committee or its
designee with respect thereto. The Trustee shall not be liable for any
distribution made in good faith
3
4
without actual notice or knowledge of the changed condition or status of any
recipient. If any distribution made by the Trustee is returned unclaimed, the
Trustee shall promptly notify the Administrative Committee or its designee and
shall dispose of the distribution as the Administrative Committee or its
designee shall direct. The Trustee shall have no obligation to search for or
ascertain the whereabouts of any payee of benefits of the Trust Fund.
Notwithstanding the foregoing, the Administrative Committee may make
distributions from the Trust Fund through a commercial banking account in a
federally insured banking institution (including the Trustee) established by the
Administrative Committee for such purpose after written notice to the Trustee
that the commercial banking account has been so established. Upon such written
notice, the Administrative Committee shall have the responsibility to assure
that any such commercial banking account is established and maintained in
accordance with ERISA and is properly insured. The Trustee shall make such
deposits from the Trust Fund to the commercial banking account as the
Administrative Committee may from time to time direct in writing. The Trustee
shall have no responsibility to account for funds held in or disbursed from any
such commercial banking account, or to prepare any information returns for tax
purposes as to distributions made therefrom.
ARTICLE THREE: SEPARATE ACCOUNTS AND INVESTMENT ADVISERS
The Trust Fund shall consist of one or more Separate Accounts and, with
the Trustee's written consent, one or more Trustee Investment Accounts. All
Separate Accounts and any Trustee Investment Accounts shall be established by
the Trustee at the direction of the Investment Committee. The Investment
Committee shall designate assets of the Trust Fund to be allocated to each
Separate Account and each Trustee Investment Account and shall direct the
Trustee with respect to any transfer of assets between Separate Accounts or
between a Separate Account and a Trustee Investment Account; provided that no
asset shall be allocated or transferred to a Trustee Investment Account without
the Trustee's written consent. The Investment Committee shall have investment
responsibility for any assets of the Trust Fund not otherwise allocated to a
Separate Account or Trustee Investment Account, and such assets shall comprise a
Separate Investment Account for which the Investment Committee serves as
Investment Adviser. The following provisions shall apply to the Separate
Accounts:
3.1 With respect to each Separate Investment Account, the Investment
Committee shall appoint an Investment Adviser, who shall acknowledge by a
writing delivered to the Investment Committee and to the Trustee that the
Investment Adviser is a fiduciary with respect to the assets allocated thereto.
The Trustee shall act with respect to assets allocated to a Separate Investment
Account only as directed by the Investment Adviser. The Investment Committee may
direct that any or all of the assets of a Separate Investment Account be held by
a Subtrustee. The Trustee shall have custody of and
4
5
custodial responsibility for all assets of the Trust Fund held in a Separate
Investment Account except as otherwise provided in this agreement or as follows:
(a) The Subtrustee of a Subtrust shall have custody of and custodial
responsibility for any assets of a Separate Investment Account allocated
to it by the Investment Committee;
(b) The trustee of a collective or group trust fund (including
without limitation an Investment Manager or its bank affiliate) shall have
custody of and custodial responsibility for any assets of a Separate
Investment Account invested in such collective or group trust fund.
3.2 With respect to each Separate Investment Trust Account, the Trustee
and the Investment Trustee thereof shall upon the direction of the Investment
Committee execute an investment trust agreement with respect thereto. The
Investment Trustee shall have custody of all of the assets of the Separate
Investment Trust Account except such assets as the Investment Committee may from
time to time determine shall be held in the custody of the Trustee with the
Trustee's written consent; the Trustee shall act with respect to any such assets
in its custody only as directed by the Investment Trustee.
3.3 With respect to each Separate Insurance Contract Account, from assets
allocated thereto the Trustee shall purchase or continue in effect such
insurance contracts as the Investment Committee shall direct, the issuing
insurance company may credit those assets to its general account or to one or
more of its separate accounts, and the Trustee shall act with respect to those
contracts only as directed by the Investment Committee.
3.4 The Investment Committee shall have investment responsibility for
assets held in any Separate Account for which an Investment Manager or
Investment Trustee has not been retained, has been removed, or is for any reason
unwilling or unable to act. With respect to assets or Separate Accounts for
which the Investment Committee has investment responsibility, the Trustee,
acting only as directed by the Investment Committee, shall enter into such
agreements as are necessary to facilitate any investment, including agreements
entering into a limited partnership, Subtrust or the participation in real
estate funds. The Trustee shall not make any investment review of, or consider
the propriety of holding or selling, or vote any assets for which the Investment
Committee has investment responsibility.
3.5 With respect to each Separate Account, the Investment Adviser thereof
shall have the investment powers granted to the Trustee by ARTICLE FIVE, as
limited by 6.1 through 6.3 of ARTICLE SIX, as if all references therein to the
Trustee referred to the Investment Adviser.
3.6 The Investment Committee may also direct the Trustee as fiduciary to
lend securities of the Trust Fund held by the Trustee by entering into a written
agreement with the Trustee. The terms of the agreement between the Investment
Committee and the
5
6
Trustee shall be consistent with Department of Labor Prohibited Transaction
Exemption 81-6 or any successor exemption. The written agreement between the
Investment Committee and the Trustee shall direct the Trustee to enter into a
loan agreement with a borrower or borrowers. The Trustee shall transfer
securities to the borrower and invest or hold on behalf of the Trust Fund the
collateral received in exchange for the securities. Notwithstanding anything in
this agreement to the contrary, the borrower shall have the authority and
responsibility to vote securities it has borrowed. The Trustee shall maintain a
record of the market value of the loaned securities and shall be paid reasonable
compensation as agreed to by the Trustee and the Investment Committee.
3.7 The Investment Committee may direct the Trustee to (i) enter into such
agreements as are necessary to implement investment in futures contracts and
options on futures contracts; (ii) transfer initial margin to a futures
commission merchant or third party safekeeping bank pursuant to directions from
an Investment Adviser and (iii) pay or demand variation margin in accordance
with industry practice to or from such futures commission merchant based on
daily marking to market calculations. The Trustee shall have no investment or
custodial responsibility with respect to assets transferred to a futures
commission merchant or third party safekeeping bank.
ARTICLE FOUR: INVESTMENT FUNDS
The Trust Fund shall be composed of assets of the Company Stock Investment
Fund and any other Investment Funds designated in writing by the Investment
Committee. The Investment Committee is authorized to terminate the existing
Investment Funds and establish new Investment Funds by giving advance written
notice to the Trustee describing the fund to be terminated or established and
the effective date thereof; provided that in no event shall the Trustee's duties
be modified without its consent. The Investment Committee or its representative
shall direct the Trustee with respect to the allocation of assets to Investment
Funds and with respect to transfers among such Investment Funds. The Trustee
shall use its best efforts to move funds as soon as practicable when transfers
are delayed for any reason, but shall in no event be required to advance its own
funds for such purpose. Pending directions from the Investment Committee to
allocate contributions among the Investment Funds, the Trustee shall hold the
contributions in a separate account invested in short term investments,
including common or collective short term investment funds of the Trustee. Any
cash held from time to time in any Investment Fund may be invested in common or
collective funds of the Trustee or its affiliate, or participations in regulated
investment companies (including those for which the Trustee or its affiliate is
adviser).
To the extent that any Investment Fund is invested in mutual fund shares
or bank commingled funds, the Investment Committee shall initially select funds
to be invested in and shall be responsible for retaining the availability of or
terminating the availability of such funds. To the extent the Trustee is
required to enter into a custody agreement with
6
7
the sponsor of a bank commingled fund or such other type of fund, the Investment
Committee shall direct the Trustee to enter into such agreement.
The Company Stock Investment Fund shall be composed of investments in
Company Stock. The Investment Committee shall notify the Trustee in writing of
the amount of the fund to be maintained in the collective short term investment
fund and the Trustee shall not be required to advance funds to make any
transfers or distributions. Any cash held by the Trustee from time to time in
the Company Stock Investment Fund may be invested in common or collective short
term investment funds of the Trustee.
The Company has determined that daily movement of Participant balances
among the Investment Funds is an important design feature and objective of the
Plan and that timely transfers and distributions from the Company Stock
Investment Fund need to be facilitated in order to achieve such objective. The
Investment Committee may authorize and direct the Trustee in writing to seek to
obtain settlement for sales of Company Stock on an expedited basis under certain
circumstances in which case the Trustee shall carry out its responsibilities for
execution of Company Stock sale transactions in accordance with such direction
and subject to any limitations expressed therein.
ARTICLE FIVE: POWERS OF TRUSTEE
Except as otherwise provided in this agreement, the Trustee shall hold,
manage, care for and protect the assets of the Trust Fund and shall have until
actual distribution thereof the following powers and, except to the extent
inconsistent herewith, those now or hereafter conferred by law:
5.1 To retain any asset originally included in the Trust Fund or
subsequently added thereto;
5.2 To invest and reinvest the assets without distinction between income
and principal in bonds, stocks, mortgages, notes, options, futures contracts,
options on futures contracts, limited partnership interests, participations in
regulated investment companies (including those for which the Trustee or its
affiliate is adviser), or other property of any kind, real or personal, foreign
or domestic, and to enter into insurance contracts;
5.3 To deposit any part or all of the assets with the Trustee or its
affiliate as trustee, or another person or entity acting as trustee of any
collective or group trust fund which is now or hereafter maintained as a medium
for the collective investment of funds of pension, profit sharing or other
employee benefit plans, and which is qualified under Section 401(a) and exempt
from taxation under Section 501(a) of the Code, and to withdraw any part or all
of the assets so deposited; any assets deposited with the trustee of a
collective or group trust fund shall be held and invested by the trustee
thereunder pursuant to all the terms and conditions of the trust agreement or
declaration of trust
7
8
establishing the fund, which are hereby incorporated herein by reference and
shall prevail over any contrary provision of this agreement;
5.4 To deposit cash in any depository, including the banking department of
the Trustee or its affiliate and any organization acting as a fiduciary with
respect to the Trust Fund;
5.5 To hold any part of the assets in cash without liability for interest,
pending investment thereof or the payment of expenses or making of distributions
therewith, notwithstanding the Trustee's receipt of "float" from such uninvested
cash;
5.6 To cause any asset, real or personal, to be held in a corporate
depository or federal book entry account system or registered in the Trustee's
name or in the name of a nominee or in such other form as the Trustee deems best
without disclosing the trust relationship;
5.7 To vote, either in person or by general or limited proxy, or refrain
from voting, any corporate securities for any purpose, except that any security
as to which the Trustee's possession of voting discretion would subject the
issuing company or the Trustee to any law, rule or regulation adversely
affecting either the company or the Trustee's ability to retain or vote company
securities, shall be voted as directed by the Investment Committee; to exercise
or sell any subscription or conversion rights; to consent to and join in or
oppose any voting trusts, reorganizations, consolidations, mergers, foreclosures
and liquidations and in connection therewith to deposit securities and accept
and hold other property received therefor;
5.8 To lease any assets for any period of time though commencing in the
future or extending beyond the term of the trust;
5.9 To borrow money from any lender, to extend or renew any existing
indebtedness and to mortgage or pledge any assets;
5.10 To sell at public or private sale, contract to sell, convey,
exchange, transfer and otherwise deal with the assets in accordance with
industry practice, and to sell put and covered call options from time to time
for such price and upon such terms as the Trustee sees fit; the Company
acknowledges that the Trustee may reverse any credits made to the Trust Fund by
the Trustee prior to receipt of payment in the event that payment is not
received;
5.11 To employ agents, attorneys and proxies and to delegate to any one or
more of them any power, discretionary or otherwise, granted to the Trustee;
5.12 To compromise, contest, prosecute or abandon claims in favor of or
against the Trust Fund;
8
9
5.13 To appoint foreign custodians as agent of the Trustee to custody
foreign securities holdings of any Separate Account established by the
Investment Committee or of any Trustee Investment Account;
5.14 To lend securities held by the Trustee and to receive and invest
collateral provided by the borrower, all pursuant to a written agreement with
the Administrative Committee;
5.15 To utilize any tax refund claim procedures with respect to taxes
withheld to which the Trust Fund may be entitled under applicable tax laws,
treaties and regulations; any exercise of such power by the Trustee shall be on
a best efforts basis; and
5.16 To perform other acts necessary or appropriate for the proper
administration of the Trust Fund, execute and deliver necessary instruments and
give full receipts and discharges.
ARTICLE SIX: LIMITATIONS ON POWERS
For purposes of this agreement, the powers and responsibilities allocated
to the Trustee shall be limited as follows:
6.1 The powers of the Trustee shall be exercisable for the exclusive
purpose of providing benefits to the Participants and Beneficiaries under the
Plan and in accordance with the standards of a prudent man under ERISA;
6.2 Subject to 6.1 and 6.3, the Trustee shall diversify the investments of
that portion of the Trust Fund for which it has investment responsibility so as
to minimize the risk of large losses;
6.3 Subject to 6.1, the Trustee shall, with respect to that portion of the
Trust Fund for which it has investment responsibility, follow the investment
guidelines established by the Investment Committee given in exercise of that
Committee's responsibility;
6.4 Except as otherwise provided in 3.6, the Trustee shall not make any
investment review of, consider the propriety of holding or selling, or vote
other than as directed by the Investment Adviser, any assets of the Trust Fund
allocated to a Separate Account in accordance with ARTICLE THREE, except that if
the Trustee shall not have received contrary instructions from the Investment
Adviser thereof, the Trustee shall invest for short term purposes any cash
consisting of U.S. dollars of a Separate Account in its custody in bonds, notes
and other evidences of indebtedness having a maturity date not beyond five years
from the date of purchase, United States Treasury bills, commercial paper,
bankers' acceptances and certificates of deposit, and undivided interests or
participations therein and (if subject to withdrawal on a daily or weekly basis)
participations in common or collective funds composed thereof. For currencies
other than
9
10
U.S. dollars, the Trustee shall invest cash of a Separate Account as directed
by the Investment Adviser with respect to that Separate Account and such
investments may include an interest bearing account of a foreign custodian;
and
6.5 The Trustee shall vote shares of Company Stock held in the Company
Stock Investment Fund and respond to a tender or exchange offer in accordance
with (a) of the following provisions:
(a) The Trustee, or the Company upon written notice to the Trustee,
shall furnish to each Participant who has Company Stock credited to his or
her individual account under the Company Stock Investment Fund the date
and purpose of each meeting of the stockholders of the Company at which
Company Stock is entitled to be voted. The Trustee, or the Company if it
has furnished the above information, shall request from each Participant
instructions to be furnished to the Trustee (or to a tabulating agent
appointed by the Trustee) as to the voting at that meeting of Company
Stock credited to the Participant's account. If the Participant furnishes
such instructions to the Trustee or its agent within the time specified in
the notification, the Trustee shall vote such Company Stock in accordance
with the Participant's instructions. All Company Stock credited to
Participant accounts as to which the Trustee or its agent do not receive
instructions as specified above, and all unallocated Company Stock held in
the Company Stock Investment Fund shall be voted by the Trustee
proportionately in the same manner as it votes Company Stock as to which
the Trustee or its agent have received voting instructions as specified
above. Similarly, the Trustee, or the Company upon written notice to the
Trustee, shall furnish to each Participant who has Company Stock credited
to his or her individual account under the Company Stock Investment Fund
notice of any tender offer for, or a request or invitation for tenders of,
Company Stock received by the Trustee. The Trustee, or the Company if it
has furnished such notice, shall request from each such Participant
instructions to be furnished to the Trustee (or to a tabulating agent
appointed by the Trustee) as to the tendering of Company Stock credited to
the participant's account and for this purpose the Trustee or the Company,
as the case may be, shall provide Participants with a reasonable period of
time in which they may consider any such tender offer for, or request or
invitation for tenders of, Company Stock of which the Trustee has been
advised by the Administrative Committee. The Trustee shall tender such
Company Stock as to which the Trustee or its agent have received
instructions to tender from Participants within the time specified by the
Trustee or the Company, as the case may be. Company Stock credited to
Participant accounts as to which the Trustee or its agent have not
received instructions from Participants shall not be tendered. As to all
unallocated Company Stock held by the Trustee, the Trustee shall tender
the same proportion thereof as the Company Stock as which the Trustee or
its agent have received instructions from Participants to tender bears to
all Company Stock allocated to Participant accounts. The Administrative
Committee shall provide the Trustee with timely information regarding
proxy voting and tender offers and in carrying out its
10
11
responsibilities under this provision the Trustee may conclusively rely on
information furnished to it by the Administrative Committee, including the
names and current addresses of Participants, the number of shares of
Company Stock credited to Participant accounts under the Company Stock
Investment Fund, and the number of shares of Company Stock held by the
Trustee in the Company Stock Investment Fund that have not yet been
allocated.
A Participant shall be a "named fiduciary" under ERISA to the extent
of the Participant's authority to direct the investment in, voting,
tender, exchange or sale of Company Stock allocated to the Participant's
account and their proportionate share of unallocated Company Stock held by
the Trustee.
(b) No provision of this Section 6.5 shall prevent the Trustee from
taking any action relating to its duties under this Section 6.5 if the
Trustee determines in its sole discretion that such action is necessary in
order for the Trustee to fulfill its fiduciary responsibilities under
ERISA.
(c) Purchases and sales of Company Stock may be made to, from or
through any source, provided that such purchases from or sales to a party
in interest (as defined in Section 3(14) of ERISA) shall comply with the
requirements of Section 408(e) of ERISA. Rights, options or warrants
offered to purchase Company Stock shall be exercised by the Trustee to the
extent that there is cash available for the investment; to the extent cash
is not available, the same shall be sold on the open market.
(d) Except for the short term investment of cash, the Company has
limited the investment power of the Trustee in the Company Stock
Investment Fund to the purchase of Company Stock. The Trustee shall not be
liable for the purchase, retention, voting, tender, exchange or sale of
Company Stock and the Company (which has the authority to do so under the
laws of the state of its incorporation) agrees to indemnify THE NORTHERN
TRUST COMPANY from any liability, loss and expense, including reasonable
legal fees and expenses which THE NORTHERN TRUST COMPANY may sustain by
reason of purchase, retention, voting, tender, exchange or sale of Company
Stock, but only to the extent the Trustee acts in accordance with the
terms of this agreement. This paragraph shall survive the termination of
this agreement.
6.6 The Investment Committee shall have sole responsibility for the
decision to maintain the custody of foreign investments abroad. Except as
otherwise directed by the Investment Committee, custody of foreign investments
shall be maintained with foreign custodians selected by the Trustee. The Trustee
shall have no responsibility for losses to the Trust Fund resulting from the
acts or omissions of any foreign custodian selected by the Trustee unless due to
(i) the foreign custodian's fraud, negligence or willful misconduct or (ii) the
Trustee's failure to prudently select a custodian from the custodians available
in the jurisdiction being invested in. The Trustee shall maintain custody of
11
12
foreign investments in any jurisdiction where the Trustee has not selected a
custodian solely as directed by the Investment Committee. The Trustee shall have
no responsibility for the financial condition, acts or omissions of any foreign
custodian holding assets of the Trust fund at the direction of the Investment
Committee.
6.7 The Trustee shall have no responsibility for: (a) any condition which
now exists or may hereafter be found to exist in, under, or about any real
estate investment of the Trust Fund or of a corporation organized under Section
501(c)(2) or 50l(c)(25) of the Code, the stock of which is held as an asset of
the Trust Fund; or (b) any violation of any applicable environmental or health
or safety law, ordinance, regulation or ruling; or (c) the presence, use,
generation, storage, release, threatened release, or containment, treatment or
disposal of any hazardous or toxic substances or materials including such
situations at or activities on any investment of the Trust Fund or of a Section
501(c)(2) or 501(c)(25) corporation, the stock of which is held as an asset of
the Trust Fund. The Trustee is hereby authorized to pay from the Trust Fund all
costs and expenses (including reasonable attorneys fees) relating to or
connected with any condition, violation, presence or other situation referred to
in (a), (b) and (c) above, and notwithstanding anything to the contrary in this
agreement, to the extent permitted by law, THE NORTHERN TRUST COMPANY shall be
indemnified from the Trust Fund from all claims, suits, losses and expenses
(including reasonable attorneys fees) arising therefrom. The authority to pay
from the Trust Fund and the right of indemnification set forth in the preceding
sentence include and relate to, without limitation, any claims, suits,
liabilities, losses and expenses (including attorneys fees) arising from any
matters relating to the existence of petroleum including crude oil and any
fraction thereof, hazardous substances, pollutants, or contaminants as defined
in the Comprehensive Environmental, Responsibility, Compensation, and Liability
Act, as amended, 42 U.S.C. Section 9601 et seq., or hazardous wastes as defined
in the Resource Conservation and Liability Act, 42 U.S.C. Section 6906 et seq.,
or as any of the foregoing terms or similar terms may be defined in similar
state environmental laws or subsequent federal or state legislation of a similar
nature which may be enacted from time to time. This paragraph shall survive the
sale or other disposition of any real estate investment of the Trust Fund and
the termination of this agreement. Nothing in this paragraph shall be construed
to in any way limit the indemnification rights of the Trustee provided for in
ARTICLE NINE.
ARTICLE SEVEN: ACCOUNTS
The Trustee shall maintain accounts of all receipts and disbursements,
including contributions, distributions, purchases, sales and other transactions
of the Trust Fund. The accounts, and the books and records relating thereto,
shall be open to inspection and audit at all reasonable times by any person or
persons designated by the Investment Committee or entitled thereto, under ERISA.
Within 120 days after the close of each fiscal year of the Trust Fund and
of any other period agreed upon by the Trustee and the Investment Committee the
Trustee shall
12
13
render to the Investment Committee a statement of account for the Trust Fund for
the period commencing with the close of the last preceding period and a list
showing each asset thereof as of the close of the current period and its cost
and fair market value. The Trustee shall rely conclusively upon the
determination of the issuing insurance company with respect to the fair market
value of each insurance contract and upon the determination of the Investment
Adviser of each Separate Account with respect to the fair market value of those
assets allocated thereto for which the Trustee deems not to have a readily
ascertainable value, and the Trustee shall have no responsibility with respect
thereto.
An account of the Trustee may be approved by the Investment Committee by
written notice delivered to the Trustee or by failure to object to the account
by written notice delivered to the Trustee within 6 months of the date upon
which the account was delivered to the Investment Committee. The approval of an
account shall constitute a full and complete discharge to the Trustee as to all
matters set forth in that account as if the account had been settled by a court
of competent jurisdiction in an action or proceeding to which the Trustee, the
Company and the Investment Committee were parties. In no event shall the Trustee
be precluded from having its accounts settled by a judicial proceeding. Nothing
in this article shall relieve the Trustee of any responsibility, or liability
for any responsibility, under ERISA.
ARTICLE EIGHT: TRUSTEE SUCCESSION
The Trustee may resign at any time by written notice to the Investment
Committee, or the Investment Committee may remove the Trustee by written notice
to the Trustee. The resignation or removal shall be effective 60 days after the
date of the Trustee's resignation or receipt of the notice of removal or at such
earlier date as the Trustee and the Investment Committee may agree.
In case of the resignation or removal of the Trustee, the Investment
Committee shall appoint a successor trustee by delivery to the Trustee of a
written instrument executed by the Investment Committee appointing the successor
trustee and a written instrument executed by the successor trustee accepting the
appointment, whereupon the Trustee shall deliver the assets of the Trust Fund to
the successor trustee but may reserve such reasonable amount as the Trustee may
deem necessary for outstanding and accrued charges against the Trust Fund.
The successor trustee, and any successor to the trust business of the
Trustee by merger, consolidation or otherwise, shall have all the powers given
the originally named Trustee. No successor trustee shill be personally liable
for any act or omission of any predecessor. Except as otherwise provided in
ERISA, the receipt of the successor trustee and the approval of the Trustee's
final account by the Investment Committee in the manner provided in ARTICLE
SEVEN shall constitute a full and complete discharge to the Trustee.
13
14
ARTICLE NINE: MISCELLANEOUS
9.1 Any action required to be taken by the Company or by a Subsidiary
shall be by resolution of its board of directors or by written direction of one
or more of its president, any vice president or treasurer. The Trustee may rely
upon a resolution or direction filed with the Trustee and shall have no
responsibility for any action taken by the Trustee in accordance with any such
resolution or direction.
9.2 The Company shall certify to the Trustee the names of the members of
the Administrative Committee and of the Investment Committee acting from time to
time, and the Trustee shall not be charged with knowledge of a change in the
membership of a Committee until so notified by the Company. Any action required
to be taken by a Committee shall be by direction of such person or persons as
shall be designated by the Committee to act for the Committee. The Trustee may
rely upon an instrument of designation signed by the secretary or chairman of
the Committee and filed with the Trustee and shall have no responsibility for
any action taken by the Trustee in accordance with any such direction.
Notwithstanding anything herein to the contrary, the Administrative Committee or
the Investment Committee may delegate any of its responsibilities hereunder to a
representative by giving to the Trustee in writing a letter which identifies the
representative and sets forth the list of its responsibilities under this
agreement that it has authorized the representative to carry out.
9.3 The Trustee may consult with legal counsel, who may also be counsel
for the Company, with respect to its responsibilities under this agreement and
shall be fully protected in acting or refraining from acting in reliance upon
the written advice of legal counsel, provided, however, that legal counsel
selected by the Trustee as provided above shall be subject to the Company's
approval which approval shall not be unreasonably withheld.
9.4 In no event shall the terms of the Plan, either expressly or by
implication, be deemed to impose upon the Trustee any power or responsibility
other than those set forth in this agreement. The Trustee may assume until
advised to the contrary that the Plan and the Trust Fund are qualified under
Section 401(a) and exempt from taxation under Section 501(a) of the Code, or
under corresponding provisions of subsequent federal tax laws. The Trustee shall
be accountable for contributions made to the Plan and included among the assets
of the Trust Fund but shall have no responsibility to determine whether the
contributions comply with the provisions of the Plan or of ERISA.
9.5 In any judicial proceeding to settle the accounts of the Trustee, the
Trustee, the Company and the Investment Committee shall be the only necessary
parties; in any other judicial proceeding with respect to the Trustee or the
Trust Fund, the Trustee, the Company and each affected Subsidiary shall be the
only necessary parties; and no Participant or Beneficiary shall be entitled to
any notice of process. A final judgment in any such proceeding shall be binding
upon the parties to the proceeding.
14
15
9.6 The Trustee shall be reimbursed for all reasonable expenses incurred
in the management and protection of the Trust Fund, including accounting and
legal fees, and shall receive such reasonable compensation for its services as
the Trustee and the Company shall from time to time determine. Those items of
expense and compensation shall be paid from the Trust Fund, subject to prior
payment or reimbursement by the Company in its discretion.
9.7 Without limiting the rights of the Trustee as otherwise provided in
this agreement, pursuant to direction by the Administrative Committee, the
Trustee shall pay from the Trust Fund reasonable expenses of the Plan or
reasonable compensation to parties providing services to the Plan including but
not by way of limitation, expenses or compensation related to actuarial, legal,
accounting, office space, printing, computer, record-keeping, investment,
performance evaluation or any other material or service provided to the Plan.
9.8 In the event that THE NORTHERN TRUST COMPANY incurs any liability,
loss, claim, suit or expense (including reasonable attorneys fees) in connection
with or arising out of its provision of services under this agreement, or its
status as Trustee hereunder, under circumstances where THE NORTHERN TRUST
COMPANY cannot obtain or would be precluded by law from obtaining payment or
reimbursement of such liability, loss, claim, suit or expense (including
attorneys fees) from the Trust Fund, then the Company (which has the authority
to do so under the laws of the state of its incorporation) shall indemnify and
hold THE NORTHERN TRUST COMPANY harmless from and against such liability, loss,
claim, suit or expense, except to the extent such liability, loss, claim, suit
or expense arises from or in connection with a breach by the Trustee of
responsibilities specifically allocated to it by the terms of this agreement,
including its obligation to act in accordance with Section 5.1 hereof with
respect to such responsibilities. This paragraph shall survive the termination
of this agreement.
The Trustee shall indemnify the Company and hold it harmless from and
against any and all liability, loss, claim, suit or expense (including
reasonable attorneys' fees) that may be incurred by the Company arising out of
or in connection with the Trustee's negligence, bad faith or willful misconduct
in the performance of responsibilities specifically allocated to it by the terms
of this agreement (including its obligation to act in accordance with Section
5.1 hereof with respect to such responsibilities).
9.9 Neither the Company, the Administrative Committee nor the Investment
Committee shall direct the Trustee to cause any part of the Trust Fund to be
diverted to any purpose other than the exclusive benefit of the Participants and
Beneficiaries or, except as otherwise permitted under the Plan and under ERISA,
to be remitted to the Company or a Subsidiary.
9.10 Any person dealing with the Trustee shall not be required to see to
the application of any money paid or property delivered to the Trustee or
inquire into the provisions of this agreement or of the Plan or the Trustee's
authority thereunder or
15
16
compliance therewith, and may rely upon the statement of the Trustee that the
Trustee is acting in accordance with this agreement.
9.11 Except as otherwise directed by the Administrative Committee, which
direction shall be in compliance with all applicable provisions of the 1984
Retirement Equity Act, the Plan and Section 401(a)(13) of the Code, any interest
of a Participant or Beneficiary in the Trust Fund or the Plan or in any
distribution therefrom shall not be subject to the claim of any creditor, any
spouse for alimony or support, or others, or to legal process, and may not be
voluntarily or involuntarily alienated or encumbered.
9.12 If for any reason the Trustee is unwilling or unable to act as to any
property, such person or qualified corporation as the Trustee shall from time to
time designate in writing shall act as special trustee as to that property. Any
person or corporation acting as special trustee may resign at any time by
written notice to the Trustee. Each special trustee shall have the powers
granted to the Trustee by this agreement, to be exercised only with the approval
of the Trustee, to which the net income and the proceeds from sale of any part
or all of the property shall be remitted to be administered under this
agreement.
9.13 Loans to Participants as provided for in the Plan shall be granted
and administered by the Administrative Committee. The Trustee shall distribute
cash to such Participants who are granted loans in such amount and at such times
as the Administrative Committee shall from time to time direct in writing. Loan
payments collected by the Administrative Committee shall be forwarded to the
Trustee. The amount of such loans shall be carried by the Trustee as an asset of
the trust equal to the combined unpaid principal balance of all Participants.
The Trustee shall rely conclusively upon the determination of the Administrative
Committee with respect to the amount of the combined unpaid principal balance of
all Participants. The Trustee shall have no responsibility to ascertain whether
a loan complies with the provisions of the Plan, for the decision to grant a
loan or for the collection and repayment of a loan.
ARTICLE TEN: GOVERNING LAW
The provisions of ERISA and, to the extent not pre-empted by ERISA, the
internal laws of Illinois shall govern the validity, interpretation and
enforcement of this agreement. The invalidity of any part of this agreement
shall not affect the remaining parts thereof
ARTICLE ELEVEN: AMENDMENT AND TERMINATION
The Company may at any time or times with the consent of the Trustee
amend this agreement in whole or in part by instrument in writing delivered to
the Trustee and effective upon the date therein provided.
16
17
This agreement shall terminate by action of the Company. Upon termination,
the Trustee shall distribute the Trust Fund in the manner directed by the
Investment Committee, in cash or in kind or partly in each as the Trustee and
the Investment Committee shall agree, except that the Trustee shall be entitled
to prior receipt of such rulings and determinations from such administrative
agencies as it may deem necessary or advisable to assure itself that the
distribution directed is in accordance with law and will not subject the Trust
Fund or the Trustee to liability, and except, further, that the Trustee may
reserve such reasonable amount as the Trustee may deem necessary for outstanding
and accrued charges against the Trust Fund.
This agreement shall terminate in its entirety when there is no asset
included in the Trust Fund.
IN WITNESS WHEREOF, the Company and the Trustee have executed this
agreement by their respective duly authorized officers and have caused their
respective corporate seals to be affixed hereto the day and year first above
written.
PAINEWEBBER, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Its: Vice President, Corporate Benefits
------------------------------------
ATTEST:
/s/ Xxxxxxxxx Xxxxxx
----------------------------
Xxxxxxxxx Xxxxxx, Asst. Secy
(CORPORATE SEAL)
THE NORTHERN TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxx
------------------------------
Its: Vice President
----------------------------
ATTEST:
The Northern Trust Company executes this
---------------------------- instrument as Trustee of aforesaid, and is
ASSISTANT SECRETARY not to be held liable in its individual
capacity in any way by reason of this
(CORPORATE SEAL) instrument.
17
