Exhibit 10.2
SEABOARD CORPORATION EXECUTIVE RETIREMENT PLAN TRUST
THIS AGREEMENT made this 5th day of November, 2004, by and
between Seaboard Corporation (the "Company") as the settlor, and
Xxxxxx X. Xxxxx as the trustee (the "Trustee");
WHEREAS, the Company desires to retain certain valued
executives in its employment and reward such executives for their
contributions to the achievement of Company goals and objectives
over a period of years; and
WHEREAS, in furtherance of this objective the Company
adopted the Seaboard Corporation Executive Retirement Plan (the
"Plan") for the benefit of certain executives selected from time
to time for participation in the Plan ("Executive" or
"Executives"); and
WHEREAS, the Company wishes to hereby establish a trust (the
"Trust") and to contribute to the Trust assets that will be held
therein, subject to the claims of the Company's creditors in the
event the Company is "Insolvent," as herein defined, until such
time, if any, that amounts are paid to Executives and their
beneficiaries under the Plan; and
WHEREAS, the Plan is not an employee benefit plan within the
meaning of the Employee Retirement Income Security Act of ERISA;
and
WHEREAS, it is the intention of the Company to make
contributions to the Trust to provide itself with a source of
funds to assist it in meeting its liabilities under the Plan; and
WHEREAS, the Trustee desires to accept the Trust and to act
as the Trustee hereunder;
NOW, THEREFORE, the parties do hereby establish the Trust
and agree that the Trust shall be comprised, held and disposed of
as follows:
Section 1. Establishment of Trust.
(a) The Company, in its sole discretion, will transfer to the
Trustee cash or other property acceptable to the Trustee which
shall become the initial principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this
Trust Agreement.
(b) The Trust shall be known as the "Seaboard Corporation
Executive Retirement Plan Trust."
(c) The Trust hereby established shall be irrevocable.
(d) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part 1,
subchapter J, chapter 1, subtitle A of the Internal Revenue Code
of 1986, as amended, and shall be construed accordingly.
(e) The principal of the Trust, and any earnings thereon, shall
be held separate and apart from other funds of the Company and
shall be used exclusively for the uses and purposes of Executives
and their beneficiaries and general creditors of the Company as
herein set forth. Executives and their beneficiaries shall have
no preferred claim on, or any beneficial ownership interest in,
any assets of the Trust. Any rights created under the Plan and
this Trust Agreement shall be mere unsecured contractual rights
of Executives and their beneficiaries against Company. Any
assets held by the Trust will be subject to the claims of the
Company's general creditors under federal and state law in the
event the Company is "Insolvent," as defined in Section 3(a).
(f) The Company, in its sole discretion, may at any time, or
from time to time, make additional deposits of cash or other
property in trust with the Trustee to augment the principal to be
held, administered and disposed of by the Trustee as provided in
this Trust Agreement. Neither the Trustee nor any Executive or
beneficiary shall have any right to compel such additional
deposits except to the extent provided by separate written
agreement.
Section 2. Payments to Executives and Their Beneficiaries.
(a) At the time any amount or amounts become payable to an
Executive or the Executive's beneficiary (collectively referred
to in this Section 2 as the "Payee") under the Plan, the Company
shall advise the Trustee in writing of (i) the total amount of
such payment to be made to the Payee under the Plan, (ii) the
date such payment is to be made to the Payee, and (iii) the
amount of such payment that will be paid by the Company. The
Trustee will pay to the Payee the amount of any such payment not
paid by the Company; provided, however, in no event shall the
amount of such payment made by the Trustee to the Payee exceed
the Trust's percentage (as determined under Section 2(d)) of the
total such payment; and provided, further, that any payment made
by the Trustee shall be subject to withholding as provided in the
following sentence. 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 amounts
payable by the Trustee under this Section 2, and shall pay
amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and paid
by the Company.
(b) The entitlement of a Payee to payments under the Plan shall
be determined by the party authorized to make such determination
under the provisions of the Plan.
(c) If the principal of the Trust, and any earnings thereon, are
not sufficient to make any payment otherwise to be made by the
Trustee under Section 2(a), then the Company shall pay the
balance of each such payment. The Trustee shall notify the
Company where principal and earnings are not sufficient.
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(d) As of the last day of each year, an actuary selected by the
Company shall determine (applying the method described in Section
2(e)) the amount of assets as of such date that would be
necessary to fully fund all of the vested accrued benefits under
the Plan. The actuary shall advise the Trustee in writing of
this dollar amount. The Trustee shall then determine the Trust's
percentage for purposes of Section 2(a) by dividing the value of
the assets held in the Trust as of such last day of the year by
this dollar amount provided by the actuary; provided, however, in
no event shall the Trust's percentage exceed 100%. The Trust's
percentage determined as of the last day of a year shall apply
for purposes of any payments to be made under Section 2(a) by the
Trustee to a Payee during the period beginning on the first day
of the next year and ending on the last day of such next year.
(e) The amount of assets that will fully fund all of the vested
accrued benefits under the Plan as of the last day of a year for
purposes of determining the Trust's percentage under Section 2(d)
shall be the greater of (i) the total amount needed to fully fund
the projected benefit obligation for each vested Executive as
defined by Statement of Financial Accounting Standards #87 (FAS
87) and based on the actuarial assumptions used by the Seaboard
Corporation for purposes of the required disclosures for the Plan
under FAS 87 as of such end of year measurement date, or (ii) the
total amount that would be needed to pay in a lump sum payment to
each vested Executive as of such last day the value of such
Executive's accrued benefit calculated applying the same
assumptions that would be used for purposes of calculating a lump
sum payment under the Plan (whether or not the Executive is then
entitled to a lump sum payment under the Plan).
Section 3. Trustee Responsibility Regarding Payments to
Trust Beneficiary When Company Is Insolvent.
(a) The Trustee shall cease payments under the terms of the Plan
if the Company is Insolvent. The Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) the
Company is unable to pay its debts as they become due, or (ii)
the Company 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(e), the principal and income of the Trust
shall be subject to claims of general creditors of the Company
under federal and state law as set forth below.
(1) The Board of Directors of the Company shall have the duty to
inform the Trustee in writing of the Company's Insolvency. If a
person claiming to be a creditor of the Company alleges in
writing to the Trustee that the Company has become Insolvent, the
Trustee may engage an advisor to determine whether the Company is
Insolvent and, pending such determination, the Trustee shall
discontinue payments to Executives or their beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or
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has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent,
the Trustee shall have no duty to inquire whether the Company is
Insolvent. The Trustee may in all events rely on such evidence
concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for
making a determination concerning the Company's solvency.
(3) If at any time the Trustee or its advisor has determined
that the Company is Insolvent, the Trustee shall discontinue
payments to Executives or their beneficiaries and shall hold the
assets of the Trust for the benefit of the Company's general
creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of Executives or their beneficiaries to
pursue their rights as general creditors of the Company with
respect to payments due under the Plan or otherwise.
(4) The Trustee shall resume payment under the Plan in
accordance with Section 2 only after the Trustee or its advisor
has determined that the Company is not Insolvent (or is no longer
Insolvent).
(c) Provided that there are sufficient assets, if the Trustee
discontinues payments under the Plan from the Trust pursuant to
Section 3(b) and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate
amount of all payments due to Executives or their beneficiaries
under Section 2 for the period of such discontinuance, less the
aggregate amount of any payments made to Executives or their
beneficiaries by the Company in lieu of the payments provided for
under Section 2 during any such period of discontinuance.
Section 4. Investment Substitution Rights.
The Company shall have the right at any time, and from time
to time in its sole discretion, to substitute assets of equal
fair market value for any assets held by the Trust; provided,
however, any assets so substituted must have a readily
ascertainable fair market value and may not consist of any type
of equity interest in, or any debt issued by, the Company or any
affiliate of the Company or any entity related to the Company.
This right to substitute assets is exercisable by the Company in
a non-fiduciary capacity without the approval or consent of any
person in a fiduciary capacity.
Section 5. 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.
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Section 6. Accounting by Trustee.
The Trustee shall keep separate accurate and detailed
records of all investments, receipts, disbursements, and all
other transactions required to be made, including such specific
records as shall be agreed upon in writing between the Company
and the Trustee. Unless waived by the Company, within 60 days
following the close of each calendar year and within 60 days
after the removal or resignation of the Trustee, the Trustee
shall cause to be delivered to the Company a written account of
its administration of the Trust during such year or during the
period from the close of the last preceding year to the date of
such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it,
including a description of all securities and investments
purchased and sold with the cost or net proceeds of such
purchases or sales (accrued interest paid or receivable being
shown separately), and showing all cash, securities and other
property held in the Trust at the end of such year or as of the
date of such removal or resignation, as the case may be.
Section 7. Responsibility of Trustee.
(a) The Trustee shall act with the care, skill, prudence
and diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that the Trustee
shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by the Company
which is contemplated by, and in conformity with, the terms of
the Plan or this Trust and is given in writing by the Company.
(b) If the Trustee undertakes or defends any litigation
arising in connection with this Trust, the Company agrees to
indemnify the Trustee against the Trustee's costs, expenses and
liabilities (including, without limitation, attorneys' fees and
expenses) relating thereto and to be primarily liable for such
payments. If the Company does not pay such costs, expenses and
liabilities in a reasonably timely manner, the Trustee may obtain
payment from the Trust.
(c) The Trustee may consult with legal counsel (who may
also be counsel for the Company generally) with respect to any of
its duties or obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other professionals
to assist it in performing any of its duties or obligations
hereunder.
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(e) The Trustee shall have, without exclusion, all powers
conferred on Trustees by applicable law, unless expressly
provided otherwise herein, provided, however, that if an
insurance policy is held as an asset of the Trust, 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.
(f) Notwithstanding any powers granted to the Trustee pursuant
to this Trust Agreement or applicable law, the Trustee shall not
have any power that could give this Trust the objective of
carrying on a business and dividing the gains therefrom, within
the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal
Revenue Code.
Section 8. Compensation and Expenses of Trustee.
The Company shall pay all administrative and Trustee's fees
and expenses. If not so paid, the fees and expenses shall be
paid from the Trust.
Section 9. Resignation and Removal of Trustee.
(a) The Trustee may resign at any time by written notice to
Company, which shall be effective 30 days after receipt of such
notice unless the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on 30 days notice
or upon shorter notice accepted by the Trustee.
(c) Upon resignation or removal of the Trustee and appointment
of a successor Trustee, all assets shall be promptly transferred
to the successor Trustee. The transfer shall be completed within
60 days after receipt of notice of resignation, removal or
transfer, unless the Company extends such time limit.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 10 hereof, by the effective
date of resignation or removal under paragraph (a) or (b) of this
Section. If no such appointment has been made, the Trustee may
apply to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of the Trustee in
connection with the proceeding shall be allowed as administrative
expenses of the Trust.
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Section 10. Appointment of Successor Trustee.
(a) If the Trustee resigns or is removed in accordance with
Section 9(a) or Section 9(b), the Company may appoint any
individual or bank trust department or other party that may be
granted corporate trustee powers under state law, as a successor
to replace the Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the
new Trustee, who shall have all of the rights and powers of the
former Trustee, including ownership rights in the Trust assets.
The former Trustee shall execute any instrument necessary or
reasonably requested by the Company or the successor Trustee to
evidence the transfer.
(b) The successor Trustee need not examine the records and acts
of any prior Trustee and may retain or dispose of existing Trust
assets, subject to Section 7(a). The successor Trustee shall not
be responsible for, and Company shall indemnify and defend the
successor Trustee from, any claim or liability resulting from any
action or inaction of any prior Trustee or from any other past
event, or any condition existing at the time it becomes successor
Trustee.
Section 11. Indemnification of Trustee.
If the Trustee is one or more individuals, the Company shall
indemnify and hold harmless the Trustee from and against all
claims, liabilities, and damages, and all expenses reasonably
incurred by the Trustee (including reasonable attorney fees)
which arise as a result of the Trustee's action or failure to act
hereunder unless such action or failure to act is due to the
Trustee's gross negligence or willful misconduct. If the Trustee
is a corporate trustee, the Company shall indemnify the Trustee
against any and all claims, liabilities, and damages, and all
expenses reasonable incurred (including reasonable attorney fees)
which arise as a result of the Trustee's action or failure to act
hereunder if such action or failure to act is a direct result of
a direction or absence of direction by the Company or any other
party to the extent such direction or absence of direction is
authorized or required hereunder.
Section 12. Amendment or Termination.
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Company. Notwithstanding the
foregoing, no such amendment shall conflict with the terms of the
Plan or shall make the Trust revocable.
(b) The Trust shall not terminate until the date on which
Executives and their beneficiaries are no longer entitled to
payments pursuant to the terms of the Plan. Upon termination of
the Trust any assets remaining in the Trust shall be returned to
the Company.
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Section 13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
(b) Amounts payable to Executives and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at
law or in equity), alienated, pledged, encumbered or subjected to
attachment, garnishment, levy, execution or other legal or
equitable process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Kansas.
Section 14. Effective Date.
The effective date of this Trust Agreement shall be the day
and year first above written.
IN WITNESS WHEREOF, this Trust Agreement has been duly
executed by Company and Trustee the day and year first above
written.
SEABOARD CORPORATION
By: /s/ H. Xxxxx Xxxxxx
H. Xxxxx Xxxxxx, President
Company
/s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Trustee
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