Exhibit 10.xxxiv
BENEFIT TRUST AGREEMENT
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This TRUST AGREEMENT (the "Trust"), dated August 27, 1996, is by and
between The Xxxx Corporation, an Ohio corporation (the "Company"), and Key Trust
Company of Ohio, N.A., a national banking association (the "Trustee"), and is a
restatement in its entirety, and a continuation of, a trust established January
9, 1987, by and between the Company and Society Bank, National Association, a
national banking association.
WHEREAS, the Company is obligated under The Xxxx Supplemental Executive
Retirement Plan, The Xxxx Corporation Incentive Compensation Election Plan, The
Xxxx Corporation Deferred Compensation Plan for Directors, The Xxxx Excess
Benefit Plan, and The Xxxx Corporation Directors Retirement Plan (together, the
"Plans", and singly, the "Plan") to make certain deferred payments to certain of
the Company's present and former directors and executives (the "Executives");
and
WHEREAS, the aforesaid obligations of the Company are not funded or
otherwise secured and the Company has agreed to assure that the future payment
of said deferred payments will not be improperly withheld in the event that a
"Change in Control" of the Company (as defined in Article III hereof) should
occur; and
WHEREAS, for purposes of assuring that such deferred payments will not be
improperly withheld, the Company desires to deposit with the Trustee, subject
only to the claims of the Company's existing or future general creditors,
amounts of cash or marketable securities and certain insurance policies
sufficient to provide for such payments as they become due and payable;
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for other good valuable consideration, the parties hereto agree as follows:
ARTICLE I
THE PLANS
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Section 1.01 Plans. The Company shall continue to be liable to the
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Executive to make all payments required under the terms of the Plans to the
extent such payments have not been made pursuant to this Trust. Distributions
made from the Trust to Executives in respect of the Plans pursuant to Section
4.02 hereof shall, to the extent of such distributions, satisfy the Company's
obligations to pay benefits to such Executives under the Plans.
ARTICLE II
TRUST AND THE TRUST CORPUS
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Section 2.01 Trust. (a) Concurrently with the execution of this Trust,
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the Company is delivering to the Trustee the sum of one thousand dollars
($1,000) to be held in trust hereunder.
(b) Upon the occurrence of a Potential Change in Control, as defined in
Section 3.02 hereof, the Company shall deliver to the Trustee to be held in
trust hereunder an additional amount of cash (or marketable securities having a
fair market value equal to such amount, or some combination thereof) (the
"Additional Transfer") representing (i) ten million dollars ($10,000,000), the
purpose of which is to provide a fund from which any attorneys' fees and
expenses incurred in defending the Trust and the Trustee's payment of the
Executives' accrued benefits under the Plans may be paid, plus (ii) the present
value (determined at a discount rate of five percent (5%) per annum) of the sum
of the amounts which will be sufficient to provide for the Company's obligations
to pay the Executives' accrued benefits under the Plans.
(c) The payments by the Company pursuant to Section 2.01(b) and (d) hereof
shall be accompanied by a schedule of the individual Executives for whose
accounts such payment is being made (the "Payment Schedule" described in Section
4.02(a) hereof), which sets forth the amounts delivered in respect of each such
Executive in respect of each Plan.
(d) At six-month intervals commencing six (6) months after the delivery
of an Additional Transfer pursuant to Section 2.01(b) hereof, unless the Trust
Corpus shall theretofore have been released pursuant to Article IV or Article VI
hereof, the Company shall recalculate the Additional Transfer which would be
required to be delivered pursuant to Section 2.01(b) as of the end of the month
immediately preceding such six-month interval date. If the amount so calculated
exceeds the fair market value of the then Trust Corpus (as defined in Section
2.02(a) hereof), the Company shall promptly (and in no event later than seven
(7) days from the date of such six-month interval date) pay to the Trustee an
amount in cash (or marketable securities or any combination thereof) equal to
such excess.
Section 2.02 Trust Corpus. (a) As used herein, the term "Trust Corpus"
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shall mean the amount delivered to the Trustee as described in Section 2.01(a)
hereof plus all amounts delivered thereafter pursuant to Sections 2.01(b),
2.01(d), 2.02(c), 5.01(f) or 5.01(g) hereof, in whatever form held or invested
as provided herein. The Trust Corpus shall be held, invested and reinvested by
the Trustee in cash or marketable securities only in accordance with this
Section 2.02. The Trustee shall use its good faith efforts to invest or
reinvest from time to time all or such part of the Trust Corpus as it believes
prudent under the circumstances (taking into account, among other things,
anticipated cash requirements for the payment of benefits under the Plans) in
either one or a combination of the following investments:
(i) investments in direct obligations of the United States of America or
agencies of the United States of America or obligations unconditionally and
fully guaranteed as to principal and interest by the United States of
America, in each case maturing within one year or less from the date of
acquisition;
(ii) investments in negotiable certificates of deposit (in each case
maturing within one (1) year or less from the date of acquisition) issued by a
commercial bank organized and existing under the laws of the United States of
America or any state thereof having a combined capital and surplus of at least
one billion dollars ($1,000,000,000); or
(iii) money market funds sponsored by the Trustee or by any banking or
financial institution affiliated with the Trustee; provided, however, that the
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Trustee shall not be liable for any failure to maximize the income earned on
that portion of the Trust Corpus as is from time to time invested or reinvested
as set forth above, nor for any loss of income due to liquidation of any
investment which the Trustee in its sole discretion, believes necessary to make
payments or to reimburse expenses under the terms of this Trust.
(b) The Trust is intended to be a grantor trust within the meaning of
Section 671 of the Internal Revenue Code of 1986, as amended. All interest and
other income earned on the investment of the Trust Corpus shall be accumulated
and added at least annually to the Trust Corpus, thereafter constituting part of
such Trust Corpus.
(c) All losses of income or principal in respect of, and expenses
(including, as provided in Section 5.01(g) hereof, any expenses of the Trustee)
charged against, the Trust Corpus shall be for the account of the Company and
the Company shall be obligated to reimburse the Trust Corpus promptly for any
loss in principal amount of, or expense charged against, the Trust Corpus.
ARTICLE III
CHANGE IN CONTROL
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Section 3.01 Definition of Change in Control. For purposes of this Trust,
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a "Change in Control of the Company" shall mean a change in control of a nature
that would be required to be reported in response to Item 6(e) (or any successor
thereto) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), whether or not the
Company is then subject to such reporting requirement; provided, that, without
limitation, such a change in control shall be deemed to have occurred if:
(i) any "person" (as defined in Sections 13(d) and 14(d) of the Exchange
Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company's
representing twenty-five percent (25%) or more of the combined voting power
of the Company's then outstanding securities;
(ii) during any period of two (2) consecutive years (not including any
period prior to the execution of this Agreement) there shall cease to be a
majority of the Board comprised as follows: individuals who at the
beginning of such period constitute the Board and any new director(s) whose
election by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the period or whose election or nomination for election was previously
so approved; or
(iii) (x) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, except a merger
or consolidation which would result in the voting securities of the Company
outstanding immediately before the merger or consolidation continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving or parent entity) at least eighty
percent (80%) of the combined voting power of the voting securities of the
Company or the surviving or parent entity outstanding immediately after
such merger or consolidation, unless the Board of Directors determines that
such situation does not constitute a Change in Control, or (y) the
shareholders of the Company approve a plan of complete litigation of the
Company or an agreement for the sale or disposition by the Company of all
or substantially all the Company's assets.
Section 3.02 Definition of a Potential Change in Control. For purposes of
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this Trust, a "Potential Change in Control of the Company" shall be deemed to
have occurred if (i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change in Control of the Company, (ii)
any person (including the Company) publicly announced an intention to take or to
consider taking actions which, if consummated, would constitute a Change in
Control of the Company, (iii) any person, other than a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
Company owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
increases his beneficial ownership of the combined voting power of the Company's
then outstanding securities by five percent (5%) or more over the percentage so
owned by such person on the date hereof and, after such increase, is the
beneficial owner, directly or indirectly, of securities of the Company
representing nine-and-one-half percent (9.5%) or more of such securities; or
(iv) the Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control of the Company has occurred.
ARTICLE IV
RELEASE OF THE TRUST CORPUS
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Section 4.01 Delivery to the Company. After any amount has been delivered
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to the Trustee pursuant to Section 2.01(b) hereof, such amount, together with
any additional Trust Corpus, shall be returned to the Company six (6) months
after the date of such delivery, unless a Change in Control shall have occurred.
Such initial six-month period shall be renewed for an additional six-month
period, if any additional Potential Change in Control occurs during such initial
six-month period. The Company shall notify the Trustee of the occurrence of a
Change in Control of Potential Change in Control, and the Trustee may rely on
such notice or on any other actual notice, satisfactory to the Trustee, of such
a change or potential change which the Trustee may receive. Notwithstanding the
foregoing, the Trustee shall have no duty or obligation to make any independent
determination that such a change or potential change has occurred.
Section 4.02 Deliveries to Participants. The Trustee shall hold the Trust
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Corpus in its possession under the provisions of this Agreement until authorized
to deliver the Trust Corpus or any specified portion thereof as follows:
(a) The Company shall deliver to the Trustee, contemporaneously with any
Additional Transfer pursuant to Section 2.01(b) hereof, a schedule (the "Payment
Schedule") indicating the amounts payable in respect of each Executive, or
providing a formula or instructions acceptable to the Trustee for determining
the amounts so payable, and the time of commencement for payment of such
amounts. The Payment Schedule shall include instructions as to the amount of
interest accruing under the Plans and such instructions may be revised from time
to time to the extent so provided under the Plans. The Payment Schedule, as it
pertains to each Executive, also shall be delivered by the Company to such
Executive. A modified Payment Schedule shall be delivered by the Company to the
Trustee and to each Executive (as it pertains to such Executive) at each time
that additional amounts are required to be paid by the Company to the Trustee
under Section 2.01(d) hereof and upon the occurrence of any event, such as early
retirement of
an Executive, requiring a modification of the Payment Schedule. Except as
otherwise provided herein, the Trustee shall make payments to the Executives in
accordance with such Payment Schedule.
(b) In the event that an Executive reasonably believes that the Payment
Schedule, as modified, does not properly reflect the amount payable to such
Executive or the time or form of payment from the Trust Corpus in respect of any
Plan, such Executive shall be entitled to deliver to the Trustee written notice
(the "Executive's Notice") setting forth payment instructions for the amount the
Executive believes is payable under the relevant terms of such Plan. The
Executive shall also deliver a copy of the Executive's Notice to the Company
within three (3) business days of the delivery to the Trustee. Unless the
Trustee receives written objection from the Company within ten (10) business
days after receipt by the Trustee of such notice, the Trustee shall make the
payment in accordance with the payment instructions set forth in the Executive's
Notice.
(c) The Trustee shall be permitted to withhold from any payment due to an
Executive hereunder the amount required by law to be so withheld under Federal,
state and local wage withholding requirements or otherwise, and shall pay over
to the appropriate government authority the amounts so withheld. The Trustee
may rely on instructions from the Company as to any required withholding and
shall be fully protected under Section 5.01(g) hereof in relying on such
instructions.
(d) Except as otherwise provided herein, in the event of any final
determination by the Internal Revenue or a court of competent jurisdiction,
which determination is not appealable or the time for appeal or protest of which
has expired, or the receipt by the Trustee of a substantially unqualified
opinion of tax counsel selected by the Trustee, which determination determines,
or which opinion opines, that the Executives or any particular Executive, is
subject to Federal income taxation on amounts held in Trust hereunder prior to
the distribution to the Executives or Executive of such amounts, the Trustee
shall, on receipt by the Trustee of such opinion or notice of such
determination, pay to each Executive the portion of the Trust Corpus includible
in such Executive's Federal gross income.
Section 4.03 Deliveries to Creditors of the Company. It is the intent of
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the parties hereto that the Trust Corpus is and shall remain at all times
subject to the claims of the creditors of the Company, including, without
limitation, the general creditors. Accordingly, the Company shall not create a
security interest in the Trust Corpus in favor of the Executives or any
creditor. If the Trustee receives the notice provided for in Section 4.04
hereof, or otherwise receives actual notice that the Company is insolvent or
bankrupt as defined in Section 4.04 hereof, the Trustee will make no further
distributions of the Trust Corpus to any of the Executives but will deliver the
entire amount of the Trust Corpus only as a court of competent jurisdiction, or
duly appointed receiver or other person authorized to act by such a court, may
direct, in order to make the Trust Corpus available to satisfy the claims of the
Company's creditors, including, without limitation, the general creditors. The
Trustee shall resume distribution of Trust Corpus to the Executives under the
terms hereof, upon no less than thirty (30) days advance notice to the Company,
if it determines that the Company was not, or is no longer, bankrupt or
insolvent. Unless the Trustee has actual notice of the Company's bankruptcy or
insolvency, or has received notice from the Company, or a person claiming to be
a creditor of the Company alleging that the Company is bankrupt or insolvent,
the Trustee shall have no duty to inquire whether the Company is bankrupt or
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.
Section 4.04 Notification of Bankruptcy or Insolvency. The Company,
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through its Board of Directors and Chief Executive Officer, shall advise the
Trustee promptly in writing of the Company's bankruptcy or insolvency. The
Company shall be deemed to be bankrupt or insolvent upon the occurrence of any
of the following:
(i) The Company shall make an assignment for the benefit of creditors,
file a petition in bankruptcy, petition or apply to any tribunal for the
appointment of a custodian, receiver, liquidator, sequestrator, or any
trustee for it or a substantial part of its assets, or shall commence any
case under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution, or liquidation law or statute of any jurisdiction
(Federal or state), whether now or hereafter in effect; or if there shall
have been filed any such petition or application, or any such case shall
have been commenced against it, in which an order for relief is entered or
which remains undismissed; or the Company by any act or omission shall
indicate its consent to, approval of or acquiescence in any such petition,
application or case or order for relief or to the appointment
of a custodian, receiver or any trustee for it or any substantial part of
any of its property, or shall suffer any such custodianship, receivership,
or trusteeship to continue undischarged; or
(ii) The Company shall generally not pay its debts as such debts become
due or shall cease to pay its debts in the ordinary course of business; or
(iii) The sums of the Company's debt is greater than all of its property
at a fair valuation; or
(iv) The present saleable value of the Company's assets is less than the
amount that would be required to pay the probable liability on its existing
debts as they become absolute and matured.
ARTICLE V
TRUSTEE
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Section 5.01 Trustee. (a) The duties and responsibilities of the Trustee
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shall be limited to those expressly set forth in this Trust, and no limited
covenants or obligations shall be read into this Trust against the Trustee.
(b) If, pursuant to Section 3.02 hereof or otherwise, all or any part of
the Trust Corpus is at any time attached, garnished, or levied upon by any court
order, or in case the payment, assignment, transfer, conveyance or delivery of
any such property shall be stayed or enjoined by any court order, or in case any
order, judgment or decree shall be made or entered by a court affecting such
property or any part thereof, then and in any such events the Trustee is
authorized, in its sole discretion, to rely upon and comply with any such order,
writ, judgment or decree, and it shall not be liable to the Company (or any of
its subsidiaries) or any Executive by reason of such compliance even though such
order, writ, judgment or decree subsequently may be reversed, modified,
annulled, set aside or vacated.
(c) The Trustee shall maintain such books, records and accounts as may
be necessary for the proper administration of the Trust Corpus, including,
without limitation, as provided in Section 2.01 hereof, and shall render to the
Company, or prior to each January 31 following the date of this Trust until the
termination of this Trust (and on the date of such termination), an accounting
with respect to the Trust Corpus as of the end of the then most recent calendar
year (and as of the date of such termination). The Trustee will at all times
maintain a separate bookkeeping account for each Executive to which it will
credit each amount delivered by the Company to the Trustee with respect to such
Executive. Upon the written request of an Executive or the Company, the Trustee
shall deliver to such Executive or the Company, as the case may be, a written
report setting forth the amount held in the Trust for such Executive (or each
Executive if such request is made by the Company) and a record of the
contributions made with respect thereto by the Company.
(d) The Trustee shall not be liable for any act taken or omitted to be
taken hereunder if taken or omitted to be taken by it in good faith. The
Trustee shall also be fully protected in relying upon any notice given hereunder
which it in good faith believes to be genuine and executed and delivered in
accordance with this Trust.
(e) The Trustee may consult with legal counsel to be selected by it, and
the Trustee shall not be liable for any action taken or suffered by it in
accordance with the advice of such counsel.
(f) The Trustee shall be reimbursed by the Company for its reasonable
expenses incurred in connection with the performance of its duties hereunder and
shall be paid reasonable fees for performance of such duties in the manner
provided by Section 2.02(c) hereof and paragraph (g) of this Section 6.01.
(g) The Company agrees to indemnify and hold harmless the Trustee from
and against any and all damages, losses, claims or expenses as incurred
(including expenses of investigation and fees and disbursements of counsel to
the Trustee and any taxes imposed on the Trust Corpus or income of the Trust)
arising out of or in connection with the performance by the Trustee of its
duties hereunder. Any amount payable to the Trustee under paragraph (V) of this
Section 5.01 or this paragraph (g) and not previously paid by the company
pursuant to Section 2.02(c) hereof shall be paid by the Company promptly upon
demand therefor by the Trustee or, if the Trustee so chooses in its sole
discretion, from the Trust Corpus. In the event that payment is made hereunder
to the Trustee from the Trust Corpus. the Trustee shall promptly notify the
Company in writing of the amount of such payment. The
Company agrees that, upon receipt of such notice, it will deliver to the Trustee
to be held in the Trust an amount in cash (or in marketable securities or in
some combination thereof) equal to any payments made from the Trust Corpus to
the Trustee pursuant to paragraph (f) of this Section 5.01 or this paragraph
(g). The failure of the Company to transfer any such amount shall not in any way
impair the Trustee's right to indemnification, reimbursement and payment
pursuant to paragraph (f) of this Section 5.01 or this paragraph (g).
Section 5.02 Successor Trustee. The Trustee may resign and be discharged
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from its duties hereunder at any time by giving notice in writing of such
resignation to the Company and each Executive specifying a date (not less than
thirty (30) days after the giving of such notice) when such resignation shall
take effect. Promptly after such notice, the Company (or, if a change in
control shall previously have occurred, the Company and Executive(s) having at
least 65% percent of all amounts then held in the Trust credited to their
accounts) shall appoint a successor trustee, such trustee to become Trustee
hereunder upon the resignation date specified in such notice. If the Company
and such Executive(s) are unable to so agree upon a successor trustee within
thirty (30) days after such notice, the Trustee shall be entitled, at the
expense of the Company, to petition a United States District Court or any of the
courts of the State of Ohio having jurisdiction to appoint its successor. The
Trustee shall continue to serve until its successor accepts the trust and
receives delivery of the Trust Corpus. The Company (or, if a change in control
shall previously have occurred, the Company and Executive(s) having at least 65
percent of all amounts then held in the Trust credited to their accounts) may at
any time substitute a new trustee by giving fifteen (15) days notice thereof to
the Trustee then acting. The Trustee and any successor thereto appointed
hereunder shall be a commercial bank which is not an affiliate of the Company,
but which is a national association or established under the laws of one of the
states of the United States, and which has equity in excess of $100,000,000.
ARTICLE VI
TERMINATION AMENDMENT AND WAIVER
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Section 6.01 Termination. This Trust shall be terminated upon the
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earliest of any of the following events: (i) the exhaustion of the Trust
Corpus; (ii) the final payment of all amounts payable to all the Executives
pursuant to all amounts payable to all of the Executives pursuant to all the
Plans; or (iii) the return of the Trust Corpus to the Company pursuant to
Section 4.01 hereof; provided, however, that, prior to the occurrence of any
Potential Change in Control or Change in Control, the Company, in its sole
discretion, may terminate this Trust. Promptly upon termination of this Trust,
any remaining portion of the Trust Corpus shall be paid to the Company.
Section 6.02 Amendment and Waiver. Prior to the occurrence of any
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Potential Change in Control or Change in Control, this Trust can be amended by
an instrument in writing signed on behalf of the parties hereto. After a
Potential Change in Control or Change in Control has occurred, this Trust may
not be amended except by an instrument in writing signed on behalf of the
parties hereto together with the written consent of Executives having at least
sixty-five percent (65%) of all amounts then held in the Trust credited to their
accounts. The parties hereto, together with the consent of Executives having at
least sixty-five percent (65%) of all amounts then held in the Trust credited to
their accounts, may at any time waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto or an
Executive to any such waiver shall be valid if set forth in an instrument in
writing signed on behalf of such party or Executive. Notwithstanding the
foregoing, any such amendment or waiver may be made by written agreement of the
parties hereto without obtaining the consent of the Executives if such amendment
or waiver does not adversely affect the rights of the Executives hereunder. No
such amendment or waiver relating to this Trust may be made with respect to a
particular Executive unless such Executive has agreed in writing to such
amendment or waiver.
ARTICLE VII
GENERAL PROVISIONS
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Section 7.01 Further Assurances. The Company shall, at any time and from
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time to time, upon the reasonable request of the Trustee, execute and deliver
such further instruments and do such further acts as may be necessary or proper
to effectuate the purposes of this Trust.
Section 7.02 Certain Provisions Relating to this Trust. (a) This Trust
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sets forth the entire understanding of the parties with respect to the subject
matter hereof and supersedes any and all prior agreements, arrangements and
understandings relating thereto. This Trust shall be binding upon and inure to
the benefit of the parties and their respective successors and legal
representatives.
(b) This Trust shall be governed by and construed in accordance with the
laws of the State of Ohio, other than and without reference to any provisions of
such laws regarding choice of laws or conflict of laws.
(c) In the event that any provision of this Trust or the application
thereof to any person or circumstances shall be determined by a court of proper
jurisdiction to be invalid or unenforceable, shall not be affected thereby, and
each provision of this Trust shall be valid and enforced to the fullest extent
permitted by law.
Section 7.03 Arbitration. Any dispute between the Executives and the
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Company or the Trustee as the interpretation or application of the provisions of
this Trust and amounts payable hereunder shall be determined exclusively by
binding arbitration in Dayton, Ohio, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court of competent jurisdiction. All fees and
expenses of such arbitration shall be paid by the Trustee and considered an
expense of the Trust under Section 5.01(g).
Section 7.04 Notices. Any notice, report, demand or waiver required or
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permitted hereunder shall be in writing and shall be given personally or by
prepaid registered or certified mail, return receipt requested, addressed as
follows:
If to the Company: The Xxxx Corporation
World Headquarters
Xxxxxxxxxx Xxxxx Xxxxxxxxx
Xxxxxx, Xxxx 00000
Attention: Secretary
If to the Trustee: Key Trust Company of Ohio, N.A.
00 Xxxxx Xxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Senior Vice President
Trust Department
If to an Executive, to the address of such Executive as listed next to his
name on Schedule A hereto.
A notice shall be deemed received upon the date of delivery if given
personally or, if given by mail, upon the receipt thereof.
Section 7.05 Trust Beneficiaries. Each Executive is an intended
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beneficiary under this Trust, and shall be entitled to enforce all terms and
provisions hereof with the same force and effect as if such person had been a
party hereto.
IN WITNESS WHEREOF, the parties have executed this Trust as of the date
first written above.
THE XXXX CORPORATION
By: XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Chairman and Chief Executive
Officer
KEY TRUST COMPANY OF OHIO, N.A.
By: XXXXXX X. XXXXXX
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Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
FIRST AMENDMENT TO
BENEFIT TRUST AGREEMENT
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WHEREAS, the Benefit Trust Agreement was established by trust agreement
dated August 27, 1996, by and between The Xxxx Corporation, an Ohio corporation
(the "Company") and Key Trust Company of Ohio, N.A., a national banking
association (the "Trustee"), as a restatement in its entirety and continuation
of a trust established January 9, 1987, by and between the Company and Society
Bank, National Association, a national banking association; and
WHEREAS, it is desirable to amend the Benefit Trust Agreement;
NOW, THEREFORE, the Benefit Trust Agreement is hereby amended, effective as
of June 24, 1998, as follows:
1. The second paragraph thereof is amended to read, in its entirety, as
follows:
"WHEREAS, the Company is obligated under The Xxxx Supplemental
Executive Retirement Plan, The Xxxx Corporation Incentive Compensation
Election Plan, The Xxxx Corporation Deferred Compensation Plan for
Directors, The Xxxx Corporation Section 415 Excess Benefit Plan, The Xxxx
Corporation Excess Earnings Benefit Plan, The 1985 Supplement to The
Xxxx Corporation Incentive Compensation Election Plan, The 1985 Supplement
to The Xxxx Corporation Deferred Compensation Plan for Directors, The Xxxx
Corporation Executive Capital Accumulation Plan, The Xxxx Corporation
Directors Capital Accumulation Plan and The Xxxx Corporation Directors
Retirement Plan, as each such plan may be amended from time to time
(together with any prior version thereof or predecessor plan thereto under
which benefits remain payable from time to time, the 'Plans', and singly,
the 'Plan') to make certain deferred payments to certain of the Company's
present and former directors and executives (together, the "Executives");
and"
2. Section 3.01 of the Plan is amended to read, in its entirety, as
follows:
"Section 3.01 Definition of Change in Control. For purposes of this
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Trust, a 'Change in Control' shall be deemed to have occurred if an event
set forth in any one of the following paragraphs shall have occurred:
(i) date of expiration of a Tender Offer (as defined below), other
than an offer by the Company, if the offeror acquires Shares (as defined below)
pursuant to such Tender Offer;
(ii) the date of approval by the shareholders of the Company of a
definitive agreement: (x) for the merger or consolidation of the Company or
any direct or indirect subsidiary of the Company into or with another
corporation, other than (1) a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent ((i) in the case of a merger or consolidation of the
Company, either by remaining outstanding or by being converted into voting
securities of the surviving entity or any parent thereof, or (ii) in the case of
a merger or consolidation of any direct or indirect subsidiary of the Company,
either by remaining outstanding if the Company continues as a parent of the
merged or consolidated subsidiary or by being converted into voting securities
of the surviving entity or any parent thereof) at least 51% of the combined
voting power of the voting securities of the Company or such surviving or parent
entity outstanding immediately after such merger or consolidation, or (2) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no Person (as defined below) is or becomes the
Beneficial Owner (as defined below), directly or indirectly, of securities of
the Company (not including in the securities Beneficially Owned by such Person
any securities acquired directly from the Company or its Affiliates)
representing 25% or more of the combined voting power of the Company's then
outstanding securities, or (y) for the sale or disposition of all or
substantially all of the assets of the Company, other than a sale or disposition
by the Company of all or substantially all of the Company's assets to an entity,
at least 51% of the combined voting power of the voting securities of which are
owned (directly or indirectly) by shareholders of the Company in substantially
the same proportions as their ownership of the Company immediately prior to such
sale or disposition;
(iii) (x) any Person is or becomes the Beneficial Owner of 25% or more
of the voting power of the then outstanding securities of the Company (not
including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its affiliates), excluding any Person who
becomes such a Beneficial Owner in connection with a transaction described in
clause (x)(l) of paragraph (ii) above or (y) the date of authorization, by both
a majority of the voting power of the Company and a
2
majority of the portion of such voting power excluding the voting power of
interested Shares, of a control share acquisition (as such term is defined in
Chapter 1701 of the Ohio Revised Code); and
(iv) a change in the composition of the Board of Directors such that
individuals who were members of the Board of Directors on the date two years
prior to such change (and any new directors (other than a director whose initial
assumption of office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation, relating to the
election of directors of the Company) who were elected, or were nominated for
election, by the Company's shareholders with the affirmative vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such two year period or whose election or nomination for
election was previously so approved) no longer constitute a majority of the
Board of Directors.
Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.
"'Affiliate' shall have the meaning set forth in Rule 12b-2 promulgated
under Section 12 of the Exchange Act.
"'Beneficial Owner' shall have the meaning defined in Rule 13d-3 under the
Exchange Act.
"'Exchange Act' shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"'Person' shall have the meaning given in Section 3 (a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or
3
(iv) a corporation owned, directly or indirectly, by the shareholders of
the Company in substantially the same proportions as their ownership of
stock of the Company."
"'Shares' shall mean shares of common stock, without par value, of The
Xxxx Corporation.
"'Tender Offer' shall mean a tender offer or a request or invitation
for tenders or an exchange offer subject to regulation under Section 14(d)
of the Exchange Act and the rules and regulations thereunder, as the same
may be amended, modified or superseded from time to time."
IN WITNESS WHEREOF, the parties have executed this First Amendment to the
Benefit Trust Agreement as of the effective date written above.
THE XXXX CORPORATION
By /s/ Xxx X. XxXxxxxxx
----------------------------
Name: Xxx X. XxXxxxxxx
Title: Vice President
KEY TRUST COMPANY OF OHIO, N.A.
By /s/ Xxxxxx X. Xxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
4
SECOND AMENDMENT TO
BENEFIT TRUST AGREEMENT
-----------------------
WHEREAS, the Benefit Trust Agreement was established by trust agreement
dated August 27, 1996, by and between The Xxxx Corporation, an Ohio corporation
(the "Company"),and Key Trust Company of Ohio, N.A., a national banking
association (the "Trustee"), as a restatement in its entirety and continuation
of a trust established January 9, 1987, by and between the Company and Society
Bank, National Association, a national banking association;
WHEREAS, the Benefit Trust Agreement was amended as of June 24, 1998;
WHEREAS, pursuant to Section 6.02 of the Benefit Trust Agreement, the terms
and provisions of the Benefit Trust Agreement may be modified or amended with
the written consent of the parties hereto; and
WHEREAS, it is desirable to further amend the Benefit Trust Agreement;
NOW, THEREFORE, the Benefit Trust Agreement, as amended, is hereby further
amended, effective as of October 28, 2000, as follows:
1. The second paragraph of the Benefit Trust Agreement is amended to
read, in its entirety, as follows:
"WHEREAS, the Company is obligated under The Xxxx Supplemental Executive
Retirement Plan, The Xxxx Corporation Incentive Compensation Election Plan, The
Xxxx Corporation Deferred Compensation Plan for Directors, The Xxxx Corporation
Section 415 Excess Benefit Plan, The Xxxx Corporation Excess Earnings Benefit
Plan, The 1985 Supplement to The Xxxx Corporation Incentive Compensation
Election Plan, The 1985 Supplement to The Xxxx Corporation Deferred Compensation
Plan for Directors, The Xxxx Corporation Executive Capital Accumulation Plan,
The Xxxx Corporation Directors Capital Accumulation Plan, The Xxxx Corporation
Directors Retirement Plan, Hilroy Excess Earnings Plan, and all Change in
Control Severance Agreements with Executives and Staff directors, as each such
plan or agreement may be amended from time to time (together with any prior
version thereof or predecessor plan thereto under which benefits remain payable
from time to time, the `Plans', and singly, the `Plan') to make certain deferred
payments to certain of the Company's present and former directors and executives
(together, the "Executives"); and"
2. Section 2.01(b) of the Benefit Trust Agreement is amended to read, in
its entirety, as follows:
"(b) Upon the occurrence of a Potential Change in Control, as defined
in Section 3.02 hereof, the Company shall deliver to the Trustee to be held in
trust hereunder an additional amount of cash (or marketable securities having a
fair market value equal to such amount, or one or more insurance policies with a
fair market value equal to at least 90% of the cash surrender value of the
applicable policy, or some combination thereof) (the "Additional Transfer")
representing (i) ten million dollars ($10,000,000), the purpose of which is to
provide a fund from which any attorneys' fees and expenses incurred in defending
the Trust and the Trustee's payment of the Executives' accrued benefits under
the Plans may be paid, plus (ii) the present value (determined at a discount
rate of five percent (5%) per annum) of the sum of the amounts which will be
sufficient to provide for the Company's obligations to pay the Executives'
benefits under the Plans. In the case of any insurance policy delivered to the
Trustee, from the date of such delivery to the date of occurrence of a Change in
Control, the Trustee shall not take any action with respect to such policy
(including, but not limited to, terminating such policy or making any borrowings
or payments thereunder) without the prior written consent of the Company."
3. Section 2.01(d) of the Benefit Trust Agreement is amended to read, in
its entirety, as follows:
"(d) At six-month intervals commencing six months after the delivery
of an Additional Transfer pursuant to Section 2.01(b) hereof, unless the Trust
Corpus shall theretofore have been released pursuant to Article IV or Article VI
hereof, the Company shall recalculate the Additional Transfer which would be
required to be delivered pursuant to Section 2.01(b) as of the end of the month
immediately preceding such six-month interval date. If the amount so calculated
exceeds the fair market value of the then Trust Corpus (as defined in Section
2.02(a) hereof), the Company shall promptly (and in no event later than seven
(7) days from the date of such six-month interval date) pay to the Trustee an
amount in cash (or marketable securities or insurance policies or any
combination thereof) equal to such excess. If, by reason of the inapplicability
of a particular Change in Control Severance Agreement with an Executive or Staff
director following a Change in Control, the fair market value of the Trust
Corpus exceeds the amount so calculated, the Trustee shall promptly (and in no
event later than seven (7) days from the date of such six-month interval date)
return to the Company an amount in cash (or marketable securities or insurance
policies or any combination thereof) equal to such excess."
IN WITNESS WHEREOF, the parties have executed this Second Amendment to the
Benefit Trust Agreement as of the effective date written above.
THE XXXX CORPORATION
By /s/ XXX X. XXXXXXXXX
--------------------------------------
Name: Xxx X. XxXxxxxxx
Title: Vice President, General Counsel
and Secretary
KEY TRUST COMPANY OF OHIO, N.A.
By /s/ XXXXXX X. XXXXXX, SENIOR V.P.
--------------------------------------
Name: Xxxxxx X. Xxxxxx CPA
Title: Senior Vice President
THIRD AMENDMENT TO
BENEFIT TRUST AGREEMENT
-----------------------
WHEREAS, the Benefit Trust Agreement was established by trust agreement
dated August 27, 1996, by and between The Xxxx Corporation, an Ohio corporation
(the "Company") and Key Bank, N.A., a national banking association (the
"Trustee"), as a restatement in its entirety and continuation of a trust
established January 9, 1987, by and between the Company and Society Bank,
National Association, a national banking association, and subsequently amended,
effective as of June 24, 1998, and October 28, 2000; and
WHEREAS, it is desirable to further amend the Benefit Trust Agreement;
NOW, THEREFORE, the Benefit Trust Agreement, as amended, is hereby further
amended, effective as of June 28, 2001, as follows:
1. The second paragraph thereof is amended to read, in its entirety, as
follows:
"WHEREAS, the Company is obligated under The Xxxx Supplemental
Executive Retirement Plan, The Xxxx Corporation Incentive Compensation
Election Plan, The Xxxx Corporation Deferred Compensation Plan for
Directors, The Xxxx Corporation Section 415 Excess Benefit Plan, The Xxxx
Corporation Excess Earnings Benefit Plan, The 1985 Supplement to The Xxxx
Corporation Incentive Compensation Election Plan, The 1985 Supplement to
The Xxxx Corporation Deferred Compensation Plan for Directors, The Xxxx
Corporation Executive Capital Accumulation Plan, The Xxxx Corporation
Directors Capital Accumulation Plan, The Xxxx Corporation Directors
Retirement Plan, The Xxxx School & Office Products (Canada) Limited
Supplemental Employee Retirement Plan, the XxXxxxxx Letter dated May 7,
2001, and all Change in Control Severance Agreements with Executives and
Staff directors, as each such plan, letter or agreement may be amended from
time to time (together with any prior version thereof (except in the case
of the XxXxxxxx Letter) or predecessor plan thereto under which benefits
remain payable from time to time, the 'Plans,' and singly, the 'Plan') to
make certain deferred payments to certain of the Company's present and
former directors and executives (together, the "Executives"); and "
2. The first phrase of the first sentence of Section 2.01(b) of the
Benefit Trust Agreement, "Upon the occurrence of a Potential Change in Control,
as defined in Section 3.02 hereof," is amended to read, in its entirety, as
follows: "No later than the tenth business day (the "Funding Date") following
the occurrence of a Potential Change in Control, as defined in Section 3.02
hereof,".
3. The last clause of the first sentence of Section 6.01 of the Benefit
Trust Agreement, "provided, however, that, prior to the occurrence of any
Potential Change in Control or Change in Control, the Company, in its sole
discretion, may terminate this Trust." is amended to read, in its entirety, as
follows: "provided, however, that, prior to the earlier of the Funding Date or
any Change in Control, the Company, in its sole discretion, may terminate this
Trust; and, provided, further, that the Company, in its sole discretion, may
terminate this Trust during the ten-business-day period immediately following
any return of the Trust Corpus to the Company pursuant to Section 4.01 hereof."
19
4. The first sentence of Section 6.02 of the Benefit Trust Agreement is
amended to read, in its entirety, as follows:
"Prior to the earlier of the Funding Date or any Change in Control (and
also during the ten-business-day period immediately following any return of the
Trust Corpus to the Company pursuant to Section 4.01 hereof), this Trust can be
amended by an instrument in writing signed on behalf of the parties hereto."
5. The first phrase of the second sentence of Section 6.02 of the Benefit
Trust Agreement, "After a Potential Change in Control or Change in Control has
occurred," is amended to read, in its entirety, as follows: "On and after the
earlier of the Funding Date or any Change in Control (except during the ten-
business-day period immediately following any return of the Trust Corpus to the
Company pursuant to Section 4.01 hereof),".
IN WITNESS WHEREOF, the parties have executed this Third Amendment to the
Benefit Trust Agreement as of the effective date written above.
THE XXXX CORPORATION
By /s/ XXX X. XXXXXXXXX
------------------------------------------
Name: Xxx X. XxXxxxxxx
Title: Vice President, General Counsel
and Secretary
KEY BANK, N.A.
By /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx, CPA
Title: Senior Vice President
20
FOURTH AMENDMENT
TO BENEFIT TRUST AGREEMENT
--------------------------
WHEREAS, the Benefit Trust Agreement was established by trust agreement
dated August 27, 1996, by and between The Xxxx Corporation, an Ohio corporation
(the "Company") and Key Bank, N.A., a national banking association (the
"Trustee"), as a restatement in its entirety and continuation of a trust
established January 9, 1987, by and between the Company and Society Bank,
National Association, a national banking association, and subsequently amended,
effective as of June 24, 1998, October 28, 2000, and June 28, 2001; and
WHEREAS, it is desirable to further amend the Benefit Trust Agreement;
NOW, THEREFORE, the Benefit Trust Agreement, as amended, is hereby further
amended, effective as of August 28, 2001, as follows:
Article III of the Benefit Trust Agreement is amended by adding the
following provision as a new Section 3.03 to the end thereof:
3.03 Notwithstanding the foregoing provisions of this Article or
anything in the Trust to the contrary, none of (i) the execution of the
Agreement and Plan of Merger by and among MWHolding Corporation, Xxxxxxx
Merger Sub Corporation, Xxxxxxx Merger Sub Corporation, the Company and
Westvaco Corporation dated as of August 28, 2001 (such Agreement, including
any amendments hereafter made thereto, the "Merger Agreement"), (ii) any
public announcement described in Section 3.02(ii) made in connection with
transactions contemplated by the Merger Agreement, (iii) the increase of
any person of his beneficial ownership of the combined voting power of the
Company's outstanding securities made in connection with the transactions
contemplated by the Merger Agreement as described in Section 3.02(iii);
(iv) any resolution of the Board described in Section 3.02(iv) made in
connection with the transactions contemplated by the Merger Agreement, nor
(v) the consummation of the transactions contemplated by the Merger
Agreement, shall constitute either a Change in Control or Potential Change
in Control within the meaning of the Trust. No contributions by the Company
to the Trust shall be required under the Benefit Trust Agreement with
respect to any event, action or circumstance occurring from or after
execution of the Merger Agreement and prior to the Effective Time of the
Mergers (as defined in the Merger Agreement). Notwithstanding the
immediately preceding sentence, if the Merger Agreement shall be terminated
pursuant to Article VIII of the Merger Agreement, and if any event, action
or circumstance which is not described in the immediately preceding
sentence and would constitute a Potential Change in Control under the
amended Trust has occurred from or after the execution of the Merger
Agreement and on or before the termination of the Merger Agreement, then,
for all purposes of the Trust (including, without limitation, the timing of
contributions required to be made by the Company to the Trust), such event,
action or circumstance shall be deemed to have occurred immediately after
the termination of the Merger Agreement and the immediately preceding
sentence shall be of no further force and effect.
Section 7.02 of the Benefit Trust Agreement is amended by adding the
following provision as a new Section 7.02(d) to the end thereof:
(d) From and after the Effective Time (as defined in the Merger
Agreement), the term "Company" shall refer to MeadWestvaco
Corporation.
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment to the
Benefit Trust Agreement as of the effective date written above.
THE XXXX CORPORATION
By /s/ XXXXX X. XXXXX, XX.
------------------------------------
Name: Xxxxx X. Xxxxx, Xx.
Title: Vice President, Finance and
Treasurer
KEY BANK, N.A.
By /s/ XXXXXX X. XXXXXX
------------------------------------
Name: Xxxxxx X. Xxxxxx, CPA
Title: Senior Vice President
2
