TRUST AGREEMENT
(as amended and restated effective December 31, 1998)
THIS TRUST AGREEMENT is made and entered into this 31st day of December,
1998, by and between BANKAMERICA CORPORATION ("Company"), and NationsBank, N.A.
("Trustee").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, NB Holdings Corporation, as successor to Xxxxxxx Xxxxx, Inc.
sponsors the Management Excess Savings Plan of Xxxxxxx Xxxxx, Inc. and Its
Affiliates (a nonqualified deferred compensation plan) (the "MESP Plan"); and
WHEREAS, Trustee currently serves as Trustee of the grantor trust (the
"Trust") established and maintained for the MESP Plan pursuant to the Management
Excess Savings Plan of Xxxxxxx Xxxxx, Inc. and Its Affiliates Trust Agreement
dated November 10, 1993 (the "Trust Agreement"); and
WHEREAS, the MESP Plan is being merged with and into the NationsBank
401(k) Restoration Plan (the "NationsBank Plan") effective as of December 31,
1998, and as a result thereof Company is succeeding to NB Holdings Corporation
as the obligor to the liabilities of the MESP Plan; and
WHEREAS, in the opinion of Company, the Trust Agreement should be
amended and restated in its entirety to provide for the administration of the
Trust following the merger of the MESP Plan with and into the NationsBank Plan;
and
WHEREAS, in Section 11.1 of the Trust Agreement, Company (as successor
to NB Holdings Corporation as to the liabilities of the MESP Plan) has reserved
the right to amend the Trust Agreement at any time for any reason, so long as
such amendment does not make the Trust revocable;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Company and Trustee do mutually covenant and agree
that the Trust Agreement is hereby amended and restated in its entirety
effective as of December 31, 1998 as follows:
SECTION 1
Establishment of Trust
----------------------
(a) All of the assets held in the Trust immediately prior to this
amendment and restatement shall be held, invested and disposed of pursuant to
the terms and provisions of this amendment and restatement, as the same may be
amended from time to time. Company and Trustee acknowledge that at the effective
time of this amendment and restatement, the total
assets of the Trust equal the total deferred compensation liabilities under the
MESP Plan immediately prior to its merger into the NationsBank Plan.
(b) The Trust shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and
this Trust Agreement shall be construed accordingly.
(d) The principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of (i) NationsBank Plan participants who had MESP Plan
account balances transferred to the NationsBank Plan on December 31, 1998 ("MESP
Participants") and (ii) general creditors, all as herein set forth. MESP
Participants and their beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the NationsBank Plan and this Trust Agreement shall be mere unsecured
contractual rights of the MESP Participants and their beneficiaries against
Company. Any assets held in the Trust shall be subject to the claims of
Company's general creditors under federal and state law in the event Company
becomes Insolvent, as defined in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any MESP Participant or
their beneficiary shall have any right to compel such additional deposits.
SECTION 2
Payments to MESP Participants and Their Beneficiaries
-----------------------------------------------------
(a) Company shall deliver to Trustee a schedule (the "Payment Schedule")
that indicates known, as well as reasonably estimated, amounts payable in
respect of each MESP Participant, that provides a formula or other instructions
acceptable to Trustee for determining the amounts so payable, the form in which
such amount is to be paid (as provided by or available under the NationsBank
Plan), and the time of commencement for payment of such amounts, and Company
shall update and amend the Payment Schedule promptly after any change in the
information set forth therein. Except as otherwise provided herein, Trustee
shall make payments to MESP Participants and their beneficiaries in accordance
with such Payment Schedule. Trustee shall make provision for the reporting and
withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of the
NationsBank Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and paid
by Company.
(b) The entitlement of a MESP Participant or their beneficiary to
benefits under the NationsBank Plan shall be determined by Company or such party
as it shall designate under the
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NationsBank Plan, and any claim for such benefits shall be considered and
reviewed under the procedures set forth in the NationsBank Plan.
(c) Company may make payment of benefits directly to MESP Participants
or their beneficiaries as they become due under the terms of the NationsBank
Plan. Company shall be entitled to be reimbursed from the Trust for any such
payment by providing Trustee with reasonable evidence of such payment having
been made. In addition, if the principal of the Trust, and any earnings thereon,
are not sufficient to make payments of benefits in accordance with the terms of
the NationsBank Plan, Company shall make the balance of each such payment as it
falls due. Trustee shall notify Company when principal and earnings are not
sufficient.
SECTION 3
Trustee Responsibility Regarding Payments to Trust
--------------------------------------------------
Beneficiary When Company is Insolvent
-------------------------------------
(a) Trustee shall cease payment of benefits to MESP Participants and
their beneficiaries if Company is Insolvent. Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay
its debts as they become due or (ii) 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, the principal and
income of the Trust shall be subject to claims of general creditors of Company
under federal and state law as set forth below.
(1) The Principal Corporate Personnel Officer of Company shall
have the duty to inform Trustee in writing if Company becomes Insolvent.
If a person claiming to be a creditor of Company alleges in writing to
Trustee that Company has become Insolvent, Trustee shall determine
whether Company is Insolvent and, pending such determination, Trustee
shall discontinue payment of benefits to MESP Participants and their
beneficiaries.
(2) Unless Trustee has actual knowledge of Company becoming
Insolvent, or has received notice from Company or a person claiming to
be a creditor alleging that Company is Insolvent, Trustee shall have no
duty to inquire whether Company is Insolvent. Trustee may in all events
rely on such evidence concerning Company's solvency as may be furnished
to Trustee and that provides Trustee with a reasonable basis for making
a determination concerning Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to MESP Participants and
their beneficiaries and shall hold the assets of the Trust for the
benefit of Company's general creditors. Nothing in this Trust Agreement
shall in any way diminish any rights of MESP Participants or their
beneficiaries to pursue their rights as general creditors of Company
with respect to benefits due under the NationsBank Plan or otherwise.
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(4) Trustee shall resume the payment of benefits to MESP
Participants and their beneficiaries in accordance with Section 2 of
this Trust Agreement only after Trustee has determined that Company is
not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to MESP
Participants or their beneficiaries under the terms of the NationsBank Plan for
the period of such discontinuance, less the aggregate amount of any payments
made to MESP Participants or their beneficiaries by Company in lieu of the
payments provided for hereunder during any such period of discontinuance.
SECTION 4
Payments to Company
-------------------
Except as provided in Section 3 hereof, Company shall have no right or
power to direct Trustee to return to Company or to divert to others any of the
Trust assets before all payment of benefits have been made to MESP Participants
and their beneficiaries pursuant to the terms of the NationsBank Plan.
SECTION 5
Investment Authority and Voting Rights
--------------------------------------
(a) Trustee shall have the discretion to invest the assets of the Trust
in such manner and in such investments as the Trustee shall determine, from time
to time, to be appropriate and consistent with the purposes of the Trust,
including without limitation shares of Company common stock ("Shares") or rights
to acquire Shares or other equity or debt obligations issued by Company.
(b) All rights associated with assets of the Trust shall be exercised by
Trustee or the person designated by Trustee, and shall in no event be
exercisable by or rest with the any MESP Participant; provided, however, that
voting rights with respect to all Shares held as Trust assets, and any decision
to accept or reject a tender offer made for such Shares, will be exercised by
Trustee in accordance with instructions received from the NationsBank Plan
administrator.
SECTION 6
Disposition of Income
---------------------
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested and used for the
purposes set forth herein.
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SECTION 7
Accounting by Trustee
----------------------
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within thirty (30) days following the close of each
calendar year and within thirty (30) days after the removal or resignation of
Trustee, Trustee shall deliver to Company a written account of its
administration of the Trust during such year or during the period from the close
of the last preceding year to the date of such removal or resignation, setting
forth all investments, receipts, disbursements and other transactions effected
by it, including a description of all securities and investments purchased and
sold with the cost or net proceeds of such purchases or sales (accrued interest
paid or receivable being shown separately), and showing all cash, securities and
other property held in the Trust at the end of such year or as of the date of
such removal or resignation, as the case may be.
SECTION 8
Responsibility of Trustee
-------------------------
(a) Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims, provided, however, that Trustee shall incur
no liability to any person for any action taken pursuant to a direction, request
or approval given by Company which is contemplated by, and in conformity with,
the terms of the NationsBank Plan or this Trust and is given in writing by
Company. In the event of a dispute between Company and a party, Trustee may
apply to a court of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising in
connection with this Trust, Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a
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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 Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Code.
SECTION 9
Compensation and Expenses of Trustee
-------------------------------------
Company shall pay all reasonable administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the Trust.
SECTION 10
Resignation and Removal of Trustee
----------------------------------
(a) Trustee may resign at any time by written notice to Company, which
shall be effective sixty (60) days after receipt of such notice unless Company
and Trustee agree otherwise.
(b) Trustee may be removed by Company on sixty (60) days notice or upon
shorter notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within ninety (90) days after receipt
of notice of resignation, removal or transfer, unless Company extends the time
limit.
(d) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of the resignation or
removal under Section 10(a) or (b) hereof. If no such appointment has been made,
Trustee may apply to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
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SECTION 11
Appointment of Successor
------------------------
(a) If Trustee resigns or is removed in accordance with Section 10(a) or
(b) hereof, Company may appoint any third party, such as a bank trust
department, that may be granted corporate trustee powers under state law, as a
successor to replace Trustee upon resignation or removal. The appointment shall
be effective when accepted in writing by the new Trustee, who shall have all of
the rights and powers of the former Trustee, including ownership rights in the
Trust assets. The former Trustee shall execute any instrument necessary or
reasonably requested by 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
Sections 7 and 8 hereof. The successor Trustee shall not be responsible for, and
Company shall indemnify and defend the successor Trustee from, any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event, or any condition existing at the time it becomes successor
Trustee.
(c) Any successor Trustee hereunder shall succeed to all of the rights,
powers, authority, duties and responsibilities of the original Trustee.
Following the appointment and acceptance of a successor Trustee hereunder, the
former Trustee shall not be liable for any acts or omissions of such successor.
SECTION 12
Amendment or Termination
------------------------
(a) This Trust Agreement may be amended by a written instrument executed
by Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the NationsBank Plan or shall make the Trust
revocable.
(b) The Trust shall not terminate until the date on which the MESP
Participants and their beneficiaries who may receive payments from the Trust are
no longer entitled to benefits pursuant to the terms of the NationsBank Plan.
Upon termination of the Trust any assets remaining in the Trust at such time
shall be returned to Company.
SECTION 13
Miscellaneous
--------------
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to MESP Participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged,
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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 North Carolina.
SECTION 14
Effective Date
---------------
The effective date of this Trust Agreement shall be the date of the
execution hereof as set forth on page 1 of this Trust Agreement.
IN WITNESS WHEREOF, Company and Trustee have caused this instrument to
be executed all as of the day and year first above written.
BANKAMERICA CORPORATION
By: /s/ Xxx X. Xxxx
--------------------------------
Name: Xxx X. Xxxx
Title: Senior Vice President
"Company"
NationsBank, N.A.
By: /s/ Xxx Xxxxxxxxxxx
--------------------------------
Name: Xxx Xxxxxxxxxxx
Title: Senior Vice President
"Trustee"
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