EX-10(12)
TRUST AGREEMENT
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This Agreement made this 7th day of November, 1997 by and between Xxxxxx'x
Entertainment, Inc., 0000 Xxxxxx Xxxx, Xxxxxxx, XX, 00000 (the "Company") and
NationsBank, 0 XxxxxxxXxxx Xxxxx, Xxxxxxxxx, XX 00000-0000 (the "Trustee");
RECITALS
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(a) WHEREAS, the Company has adopted the Non-Management Directors Stock
Incentive Plan (the "Plan") attached hereto as Exhibit A.
(b) WHEREAS, the Company has incurred or expects to incur liability under
the terms of the Plan with respect to the individuals and their beneficiaries
covered by the Plan ("Participants");
(c) WHEREAS, the Company wishes to establish a trust pursuant to this
Agreement (the "Trust") and to contribute assets to the Trust that will be held
in the Trust, subject to the claims of the Company's creditors in the event of
the Company's Insolvency, as herein defined, until either paid to Participants
or returned to the Company in such manner and at such times as specified in
this Agreement;
(d) WHEREAS, it is the intention of the parties that the Trust shall not
affect the status of the deferred provisions of the Plan as an unfunded
arrangement;
(e) WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide a source of funds to assist meeting its liabilities under
the Plan; and
(f) WHEREAS, references to the "Company" herein include Xxxxxx'x
Entertainment, Inc., and any successor to its obligations under the Plan.
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 hereby deposits, with the Trustee in trust, 26,164 shares
of the Company's Common Stock, which shall become the initial principal of the
Trust to be held, administered and disposed of by the Trustee as provided in
this Agreement. The Trust will become effective upon the Trustee's receipt of
this deposit.
(b) The Trust hereby established shall be irrevocable except as provided
herein.
(c) The Trust is intended to be a grantor trust, of which the 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, and shall be
construed accordingly.
(d) 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 Participants and general creditors as
herein set forth except when this Agreement permits or requires such funds to
be returned to the Company. Participants 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 Agreement shall be mere unsecured contractual
rights of Participants against the 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 of Insolvency, as defined in Section 3(a) herein.
(e) Within ninety (90) days following the end of each plan quarter
starting the quarter ending September 30, 1997, the Company shall be required
to irrevocably deposit additional cash or other property into the Trust (which
may include the Company's Common Stock or other securities) so that the Trust
has an amount sufficient to distribute to each Participant the benefits payable
pursuant to the terms of the Plan as of the close of such quarter assuming such
benefits were then payable in full.
Section 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR
BENEFICIARIES.
(a) Within 60 days following the execution of this Agreement, the Company
shall deliver to the Trustee a schedule (the "Payment Schedule") that indicates
the amounts payable in respect of each Participant or that provides a formula
or other instructions acceptable to the Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as provided for or
available under the Plan), and the time of commencement for payment of such
amounts. The Payment Schedule will be updated periodically as necessary, but
not less than annually, by the Company.
(b) If the Company does not make payment or deliver stock or securities
sufficient to satisfy any distribution obligation under the Plan to a
Participant when due, the Participant will be entitled to deliver to the
Trustee a written notice (the "Participant's Notice") setting forth
instructions for the distribution obligation the Participant believes is due
under the Plan. The Trustee will deliver a copy of the Participant's Notice to
the Company within ten (10) business days of receipt thereof. If the Company
does not, within ten (10) business days after receiving a copy of the
Participant's Notice, deliver written notice to the Trustee objecting to the
payment instructions contained in the Participant's Notice on the grounds that
such distribution is not due under the Plan, the
Trustee shall make the distribution referred to in the Participant's Notice.
Such distribution shall be such amount of Company stock or other securities or
trust assets as the Trustee deems reasonably appropriate to satisfy the
instructions in the Participant's Notice. The Trustee will use its best
efforts to deliver Company stock or successor securities in satisfaction of the
Plan's obligations. If it is necessary to liquidate or sell any securities in
Trust for this purpose, the Trustee may undertake such liquidation or sale as
soon as possible in order to obtain the necessary assets for the distribution.
(c) If the Company delivers timely written notice to the Trustee
objecting to the distribution to the Participant on the grounds that such
distribution is not due under the Plan, the Trustee shall deliver a copy of
such notice to the Participant within five (5) business days of the Trustee's
receipt thereof. The Trustee shall then make the distribution to cover the
obligation set forth in the Participant's Notice (unless the Company objects on
the grounds that the distribution has already been made or has already been
fully satisfied in which event the procedures at the end of this section 2(c)
shall apply) within five (5) business days after receipt from the Participant
of a written undertaking, in the form attached hereto as Exhibit B, to
indemnify and hold harmless the Escrow Agent and the Company from and against
all losses or claims which may result from any incorrect distribution which is
made to the Participant pursuant to the Participant's Notice.
If the Company gives written notice to the Trustee objecting on the grounds
that the requested distribution has already been made or has been fully
satisfied, the Trustee shall not make the distribution from the Trust upon
confirming such fact. If the Trustee does not, within ten (10) business days
after receipt of such notice from the Company, confirm that such distribution
has been made or has been fully satisfied by the Company, then the Trustee
shall make the required distribution to the Participant sufficient to satisfy,
as reasonably determined by the Trustee, the obligation described in the
Participant's Notice after receiving from the Participant the written
undertaking in the form attached as Exhibit B.
(d) It is understood that the Plan requires distributions to Participants
in the form of the Company's Common Stock or successor securities. The Trustee
will value such benefit obligations based on the market value (as defined
herein) of the Company's Common Stock (or the successor security) as of the
business day preceding the date the Trustee prepares the distribution which
will be delivered to the Participant. It is the intention of this Agreement
that the Company's obligation to issue stock or securities under the Plan will
be satisfied by an equivalent distribution by the Trustee if the Company (or
its successor) does not issue the required stock or securities when due to a
Participant or Participants.
(e) It is understood the Company is required to distribute benefits
directly to Participants as they become due under the terms of the Plan. To
the extent the Company from time to time makes distributions under the Plan
which the Trust is intended to protect, the Trustee shall, upon written request
of the Company's Controller, promptly reimburse the Company for any such
distribution by returning Trust assets to the Company equal in value to the
distribution or equal to the amount of securities that were distributed to
Participants. Such reimbursement shall be made within ten (10) days after a
written notice is delivered by the Company's Controller to the Trustee setting
forth the specific distribution made by the Company, who received the
distribution and the date thereof, and the form and amount of assets to be
returned to the Company (cash and/or securities).
(f) The entitlement of a Participant to benefits under the Plan
shall be determined in accordance with the terms of the Plan, and any claim for
such benefits shall be considered and reviewed under the procedures set out in
the Plan.
(g) If at the end of any quarter the principal of the Trust, and any
earnings thereon, will not be sufficient to make payments of Plan benefits as
if they were then payable in full as determined by the Trustee or by the
Company, the Company shall within ninety (90) days after the end of the quarter
deposit additional cash or other assets or securities (which may include
Company stock) into the Trust to the extent
necessary to keep the Trust fully funded so it will have the capability of
distributing to all Participants their benefits valued at the end of such
quarter. The Trustee shall exercise its best efforts to notify the Company when
the principal and earnings are not sufficient and of the additional amount that
must be deposited to keep the Trust fully funded. The failure of the Trustee to
give this notice will not result in any liability to the Trustee and will not
excuse the Company from insuring the Trust is fully funded. The Trustee is
under no duty to compel contributions to the Trust.
Section 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) The Trustee shall cease distributions to Participants if the
Company is Insolvent. The Company shall be considered "Insolvent" for purposes
of this 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 hereof, 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 or the Chief
Executive Officer of the Company will have the duty to notify the Trustee in
writing of the Company's Insolvency. If such a writing is given to the Trustee,
the determination of Insolvency shall be deemed made on the date the Trustee
receives such written notice. In addition, if three or more persons claiming
to be creditors of the Company allege in writing to the Trustee that the
Company has become Insolvent, the Trustee shall, within a reasonable time,
determine whether the Company is Insolvent and, pending such determination, the
Trustee shall discontinue payment of benefits to Participants. If the Trustee
does not determine that the Company is Insolvent within thirty (30) business
days after receiving written notice from three persons claiming to be creditors
of the Company alleging such Insolvency, then the Company will be deemed
solvent on the 30th day after the receipt of such notice unless and until a
determination is subsequently made by the Trustee that the Company is
Insolvent.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received written notice from the Chief Executive Officer of
the Company or from the Company's Board of Directors or from three persons
claiming to be creditors stating or 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 has determined that the Company
is Insolvent, the Trustee shall discontinue distributions to Participants,
shall notify the Company in writing of such determination, 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 Participants to
pursue their rights as general creditors of the Company with respect to
benefits due under the Plan or otherwise.
(4) If the Trustee determines the Company is Insolvent, the
Trustee shall resume the distribution of benefits to Participants in accordance
with Section 2 of this Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent). If the Trustee receives
written notice from the Company's Chief Executive Officer or Board of Directors
that the Company is not Insolvent (or is no longer Insolvent), then the Trustee
will make reasonable inquiry as to the Company's solvency. If the Trustee does
not determine the Company is Insolvent within thirty (30) days after receiving
such written notice, then the Trustee's determination of solvency shall be
deemed made as of the 30th day following receipt of such notice.
(c) Provided that there are sufficient assets in the Trust, if the
Trustee discontinues the distribution of benefits from the Trust pursuant to
Section 3(b) hereof and subsequently resumes such payments, the first
distribution to any Participant following such discontinuance shall include
the aggregate amount of all distributions
due to the Participant under the terms of the Plan for the period of such
discontinuance less the aggregate amount of any distributions made to the
Participant by the Company under the Plan during any such period of
discontinuance.
Section 4. PAYMENTS TO THE COMPANY.
Except as provided in this Agreement, the Company shall have no right or
power to direct the Trustee to return to the Company or to divert to others any
of the Trust assets before all payment of benefits have been made to
Participants pursuant to the terms of the Plan.
Section 5. INVESTMENT AUTHORITY.
(a) The Trustee may, and is expressly authorized to, invest in
securities (including stock or rights to acquire stock) or obligations issued
by the Company. All rights associated with assets of the Trust shall be
exercised by the Trustee or the person designated by the Trustee, and shall in
no event be exercisable by or rest with Participants, except that all voting
and decisional rights including but not limited to rights to decide whether to
tender such shares in a tender offer with respect to trust assets including the
Company's Common Stock will be exercised by the Company. The Trustee will
follow the Company's instructions in this regard. The Company shall have
the right at anytime, and from time to time in its sole discretion, to
substitute assets of equal fair market value for any asset held by the Trust.
This right is exercisable by the Company in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity.
(b) Since distributions from the Trust to Participants will be in
the form of the Company's Common Stock or successor securities or will be
directly based on the value of the Company's Common Stock (or successor
securities), the Company hereby requests the Trustee to invest all cash
deposits (or other non-Company stock deposits) in Common Stock of the Company
as soon as possible after such deposits are made by the Company into the Trust.
The Trustee may also invest in (without having any liability to Participants or
the Company for doing so or not doing so): (1) direct obligations of the
United States or its agencies (or obligations unconditionally and fully
guaranteed as to principal and interest by the United States or its agencies)
in each case maturing within one year from date of acquisition; (2) negotiable
certificates of deposit issued by any commercial bank (including NationsBank)
organized and existing under U.S. Laws or the laws of any state having combined
capital and surplus of at least $500 million; (3) money market funds
including, but not limited to, any money market fund maintained by NationsBank.
No investments other than those described in Section 5(a) or 5(b) herein will
be made by the Trustee unless otherwise agreed in writing by the Company and
the Trustee.
(c) The Trustee will not be liable for any failure to maximize the
income earned on funds in the Trust nor for any losses due to liquidation of
any investment which the Trustee, in its sole discretion, believes necessary to
make any distribution under the terms of the Trust. The Trustee will have no
liability if Trust assets are insufficient to satisfy any obligation to
Participants unless such insufficiency is directly caused by a breach of this
Agreement by the Trustee.
Section 6. CERTAIN FUNDING PROVISIONS
(a) All interest, income and appreciation in value of investments
shall constitute part of the Trust assets. Any dividends, interest or income
shall be reinvested and the Company requests that such reinvestments be in the
Company's Common Stock (or successor securities). All losses of income or
principal including any expenses of the Trustee charged against the Trust will
be the responsibility of the Company and in the event of such losses the
Company shall, upon written request of the Trustee, promptly deposit sufficient
assets into the Trust to insure it is fully funded. The Trustee has no duty to
compel contributions to the Trust.
(b) The Trust shall be fully funded if the market value of the Trust
assets is equal to or greater than the value of the stock rights of
Participants in the Plan as measured by the market value of the Company's
Common Stock (or successor securities) on the day the assets are valued.
(c) The market value of the Company's Common Stock shall be based on
the average of the high and low of such stock on the New York Stock Exchange on
the relevant business day. If the Company's Common Stock is converted or
changed to a different security or securities (or a combination of cash or
securities), the market value shall be based on the average of the high and low
trading price for such security or securities (together with securities
purchased using any such cash) on the New York Stock Exchange on that day. If a
stock or security is not traded on the New York Stock Exchange, then the market
value will be based on the average of the high and low prices on the principal
exchange where the stock or security is traded that day. If not traded on a
principal exchange, the Trustee will determine such market value in such manner
as it deems appropriate in its sole discretion.
Section 7. ACCOUNTING BY TRUSTEE.
The 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 the Company and the
Trustee. Within 90 days following the close of each calendar year and within 30
days after the removal or resignation of the Trustee, the Trustee shall deliver
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 8. 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. In the event of a dispute between the
Company and a party, the Trustee may apply to a court of competent jurisdiction
to resolve the dispute.
(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,
reasonable 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 or the Trustee generally) with respect to any of its
duties or obligations hereunder.
(d) The Trustee may hire agents, accountants, attorneys, actuaries,
investment advisors, financial consultants or other professionals to assist it
in performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred
on the Trustees by applicable law, unless expressly provided otherwise herein.
(f) Notwithstanding any powers granted to the Trustee pursuant to
this Agreement or under 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 9. COMPENSATION AND EXPENSES OF THE TRUSTEE.
The Company shall pay all administrative and Trustee's fees and
expenses as well as the expenses of any third parties hired by the Trustee to
assist it in performing any of its duties or obligations hereunder. If not so
paid, the fees and expenses shall be paid from the Trust. The fees payable to
the Trustee are described in Exhibit C.
Section 10. RESIGNATION AND REMOVAL OF THE TRUSTEE.
(a) The Trustee may resign at any time by written notice to the
Company, which shall be effective 90 days after receipt of such notice unless
the Company and the Trustee agree otherwise in writing.
(b) The Trustee may be removed and replaced by the Company on 90
days notice or upon shorter notice accepted by the Trustee.
(c) If the Trustee resigns or is removed, and if a successor trustee
has not been appointed, the Trustee shall select a successor trustee pursuant
to the procedures of section 11(b) hereof prior to the effective date of the
Trustee's resignation or removal.
(d) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 30 days after the
resignation or removal unless the Company extends the time limit.
(e) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date of
resignation or removal. 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 and shall be payable
by the Company..
Section 11. APPOINTMENT OF SUCCESSOR.
(a) If the Trustee resigns or is removed in accordance with section
10 hereof, the Company shall appoint a third party, such as a bank trust
department or other party
that may be granted corporate trustee powers under state law, as a successor to
replace the Trustee upon such 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 under this Agreement, 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) If the Trustee resigns or is removed pursuant to the provisions
of section 10 hereof and the Company fails to appoint a successor trustee, the
Trustee shall then select a successor Trustee. The Trustee may, in selecting a
successor Trustee, appoint any third party such as a bank trust department or
other party that may be granted corporate trustee powers under state law. The
appointment of a successor trustee shall be effective when accepted in writing
by the new Trustee. The new Trustee shall have all the rights and powers of the
former Trustee under this agreement, including ownership rights in trust
assets. The former Trustee shall execute any instrument necessary or reasonably
requested by the successor Trustee to evidence the transfer.
(c) 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 this Agreement.
The successor Trustee shall not be responsible for, and the 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 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, shall make the Trust
revocable without the written consent of all Participants, nor shall materially
and adversely affect the substantive rights of Participants without the written
consent of all Participants.
(b) The Trust shall not terminate until the date on which
Participants are no longer entitled to benefits pursuant to the terms of the
Plan unless sooner revoked in accordance with section 12(a) hereof. The
Trustee may rely on instructions from the Company that all benefits have been
paid pursuant to the Plan. However, upon written consent of all Participants
who are entitled to benefits at any time pursuant to the terms of the Plan, the
Company may terminate this Trust prior to the time all benefit payments under
the Plan have been made. All assets in the Trust at termination shall be
returned to the 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 Participants 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, except upon death. In the event of a Participant's
death, the Participant's estate or legal beneficiary shall be entitled to
Participant's rights. Counsel for Trustee shall make this determination after
reviewing appropriate documentation relating to the Participant's death, estate
and/or legal beneficiary.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of Tennessee.
(d) Any notice, demand, waiver or other communication required or
permitted under this Agreement will be in writing and will be given personally,
by Fax, certified mail, or by Federal Express or other overnight courier
service, will be deemed given when received, and will be addressed as follows:
If to the Company: Xxxxxx'x Entertainment, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Secretary
Fax: (000) 000-0000
If to the Trustee: NationsBank
Private Client Group
0 XxxxxxxXxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Any notice to a Participant will be sent by certified mail or by Federal
Express or other overnight courier service to the Participant's last known
address.
(e) Each Participant will be a third party beneficiary of this
Agreement and will be entitled to enforce the Agreement as it applies to such
Participant as if the Participant were a party hereto.
(f) This Agreement is the complete agreement of the parties with
respect to the subject matter hereof and supersedes any prior agreements or
understandings relating thereto.
(g) This Agreement is binding on the parties hereto and their
respective successors and legal representatives.
(h) The Company and the Trustee will, at any time and from time to
time, upon the reasonable request of the other party, execute and deliver such
further instruments and do such further acts as may be necessary or proper to
effectuate the purposes of this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the date written
above.
XXXXXX'X ENTERTAINMENT, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Title: Vice President
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NATIONSBANK
By: /s/ R. Xxxx Xxxxxx
--------------------------
Title: Vice President
--------------------------
Exhibit A
THE PROMUS COMPANIES INCORPORATED
1996 NON-MANAGEMENT DIRECTORS STOCK INCENTIVE PLAN
1. Purpose. The purpose of The Promus Companies Incorporated 1996
Non-Management Directors Stock Incentive Plan (the "Plan") is to attract, retain
and compensate highly-qualified individuals who are not employees of The Promus
Companies Incorporated, a Delaware corporation (the "Company") or any of its
subsidiaries or affiliates for service as members of the Board of Directors
("Non-Management Directors") by providing them with an ownership interest in the
common stock of the Company ("Common Stock"). The Company intends that the Plan
will benefit the Company and its stockholders by allowing Non-Management
Directors to have a personal financial stake in the Company through an ownership
interest in the Common Stock and will closely associate the interest of
Non-Management Directors with that of Promus's stockholders.
2. Administration. The Plan shall be administered by a committee
appointed by the Board of Directors of the Company and consisting of Directors
who are not eligible to participate in the Plan (the "Committee"). Subject to
the provisions of the Plan, the Committee shall be authorized to interpret the
Plan, to establish, amend and rescind any rules and regulations relating to the
Plan, and to make all other determinations necessary or advisable for the
administration of the Plan; provided, however, that the Committee shall have no
discretion with respect to the eligibility or selection of Non-Management
Directors to receive awards under the Plan, the number of shares of stock
subject to any such awards or the time at which any such awards are to be
granted; and provided further, that the Committee shall not have the authority
to take any action or make any determination that would materially increase the
benefits accruing to participants under the Plan. The Committee's interpretation
of the Plan, and all actions taken and determinations made by the Committee
pursuant to the powers vested in it hereunder, shall be conclusive and binding
upon all parties concerned including the Company, its stockholders and persons
granted awards under the Plan.
3. Shares Subject to Plan. The shares issued under the Plan shall not
exceed in the aggregate 150,000 shares of Common Stock. Such shares may be
authorized and unissued shares or treasury shares.
4. Participants. All active members of the Company's Board of Directors
who are not as of the date of any award employees of the Company or any of its
subsidiaries or affiliates shall be eligible to participate in the Plan.
5. Awards.
(a) Grant Dates and Formula for Automatic Grants. Shares of Common
Stock shall be automatically granted on May 1, August 1, November 1 and
February 1 of each plan year (each such date is hereinafter referred to as
a "Grant Date") to each eligible Non-Management Director commencing with
the August 1, 1996 Grant Date. The total number of shares included in each
grant under this Section 5(a) shall be determined by dividing Fifty Percent
(50%) of the amount of meeting and retainer fees (the "50% of Fees") earned
by the Non-Management Director during the three-month period immediately
preceding the Grant Date (the "Grant Period") by the fair market value per
share of the Common Stock on the Grant Date (or the immediately preceding
trading day if the Grant Date is not a trading day). The fair market value
per share shall be the average of the high and low price of the Common
Stock based upon its consolidated trading as generally reported for the
principal securities exchange on which the Common Stock is listed.
Fractions will be rounded to the next highest share. The shares or rights
to which a participant is entitled under this Section 5(a) shall be in lieu
of the payment in cash of the 50% of Fees.
(b) Grant Dates and Requirements for Elective Grants. Commencing
with the August 1, 1996 Grant Date, shares of Common Stock shall be
automatically granted on each Grant Date to each eligible Non-Management
Director who elects to receive shares under this Plan in lieu of the
portion of the amount of meeting and retainer fees earned by the
Non-Management for any period which is in excess of the 50% of Fees (the
"Additional 50% of Fees"). Such election must be made prior to the
commencement of the first Grant Period to which such election applies and
such election shall be irrevocable with respect to all future Grant
Periods. Individuals who are nominated to become Non-Management Directors
may make such election after such nomination but prior to the time that
they are elected to the Board. The total number of shares included in each
grant under this Section 5(b) shall be determined by dividing the
Additional 50% of Fees earned by the Non-Management Director during the
Grant Period by the fair market value per share of the Common Stock on the
Grant Date (or the immediately preceding trading day if the Grant Date is
not a trading day). The fair market value per share shall be the average of
the high and low price of the Common Stock based upon its consolidated
trading as generally reported for the principal securities exchange on
which the Common Stock is listed. Fractions will be rounded to the next
highest share. The shares or rights to which a participant is entitled
under this Section 5(b) shall be in lieu of the payment in cash of the
Additional 50% of Fees.
(c) Restrictions Upon Transfer. Shares awarded, and the right to
vote such shares and to receive dividends thereon, may not be sold, assigned,
transferred, exchanged, pledged, hypothecated, or otherwise encumbered until at
least six months after the date of the grant (the "Restriction Period"). During
the Restriction Period the participant shall have all other rights of a
stockholder, including, but not limited to, the right to vote and to receive
dividends on such shares. If as a result of a stock dividend (whether in
securities of the Company or of any other company), stock split, spin-off,
recapitalization, other adjustment in the stated capital of the Company, or as
the result of a merger, consolidation, reclassification or other reorganization,
or any other corporate transaction, Common Stock is increased, reduced, or
otherwise changed, and by virtue thereof the participant shall be entitled to
new or additional or different shares or if the participant receives new or
additional or different shares pursuant to any action by the Committee pursuant
to Section 10, such shares shall be subject to the same terms, conditions and
restrictions as the original shares.
(d) Certificates. Each stock certificate issued in respect of shares
awarded to a participant may bear an appropriate legend disclosing the
restrictions on transferability imposed on such shares by the Plan or by
law.
(e) Termination of Service During Grant Period. In the event of
termination of service on the Board by any participant during a Grant
Period, such participant's award for the Grant Period shall be determined
in accordance with Sections 5(a) and 5(b) of the Plan based upon the amount
of meeting and retainer fees earned during such Grant Period as of the date
of termination of service, provided, that the grant date shall be the date
of termination of service unless the grant has been deferred.
6. Withholding. Whenever the Company issues shares of Common Stock under
the Plan, the Company shall have the right to withhold from sums due the
recipient, or to require the recipient to remit to the Company, any amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements prior to the delivery of any certificate for such shares.
7. Deferral. Each participant will have the right to elect, pursuant to a
written election form delivered to the Company prior to the commencement of each
plan year (i.e., each May 1 through April 30), to defer until after the
participant's termination of service the grant of the shares that would
otherwise be granted to the participant during the next ensuing plan year.
Pursuant to this election form, the participant will elect whether all of the
deferred grant will be (a) granted within 30 days after termination of service
or (b) granted in approximately equal annual installments of shares over a
period of two to ten years (as the participant may elect) after the termination
of service, each such annual grant to be made within 30 days after the
anniversary of the
termination of service. The deferral election form signed by the executive prior
to the plan year will be irrevocable except in case of hardship (as defined in
Section 8) as determined in good faith by the Committee pursuant to Section 8.
No shares of stock will be issued until the grant date as so deferred (the
"Deferred Grant Date") at which time the Company agrees to issue the shares to
the participant. The participant will have no rights as a stockholder with
respect to the deferred rights to shares and the rights to such shares will be
unsecured.
If any dividends or other rights or distributions of any kind
("Distributions") are distributed to holders of Common Stock during the period
from the applicable Grant Date until the applicable Deferred Grant Date (the
"Deferral Period") but prior to the participant's termination of service, an
amount equal to the cash value of such Distributions on their distribution date,
as such value is determined by the Committee, will be credited to a deferred
dividend account for the participant as follows: the account will be credited
with the right to shares of Common Stock equal in value to the cash value of the
Distribution with such values determined by the Committee as of the date of the
Distribution. The Company will issue shares of stock equal to the cumulative
total of rights to the shares in such account within 30 days after the
participant's termination of service. If a Distribution is distributed to
holders of Common Stock after the participant's termination of service but
during the Deferral Period, an amount equal to the cash value of such dividends
or other rights or distributions pertaining to any share rights still deferred
shall be converted into shares of Common Stock equivalent in value to the
Distribution (with such values measured as of the date of Distribution) and such
shares will be issued to the participant as soon as practical after the date of
the Distribution. No right or interest in the deferred dividend account shall be
subject to liability for the debts, contracts or engagements of the participant
or shall be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such disposition be
voluntary or involuntary or by operation of law by judgment, levy, attachment,
garnishment or any other legal or equitable proceedings (including bankruptcy),
and any attempted disposition thereof shall be null and void and of no effect;
provided, however, that nothing in this Section 7 shall prevent transfers by
will or by the applicable laws of descent and distribution. The Committee will
have the right to adopt other regulations and procedures to govern deferral of
grants.
8. Hardship. The Committee may accelerate the distribution of all or a
portion of a participant's deferred grants on account of his Hardship, subject
to the following requirements: (i) the value of such accelerated distribution
shall not exceed the amount which is necessary to satisfy the Hardship, less the
amount which can be satisfied from other resources which are reasonably
available to the participant, (ii) the denial of the participant's request for a
Hardship acceleration would result in severe financial hardship to the
participant, and (iii) the participant has not received an accelerated
distribution on account of Hardship within the 12-month period preceding the
acceleration.
For purposes of this Plan, "Hardship" of a participant, as determined by
the Committee in its discretion on the basis of all relevant facts and
circumstances and in accordance with the following nondiscriminatory and
objective standards uniformly interpreted and consistently applied, shall mean a
severe financial hardship to the participant resulting from a sudden and
unexpected illness or accident of the participant or of his dependent, loss of
the participant's property due to casualty, or other extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the participant. A financial need shall not constitute a Hardship unless it is
for at least $1,000.00 or the entire value of the principal amount of the
participant's deferred grants.
9. Section 83(b) Election. Participants shall have the right to make an
election under Section 83(b) of the Internal Revenue Code, if applicable, with
regard to taxation of grants under the Plan.
10. Adjustments.
(a) Subject to Section 10(c) but notwithstanding any other term of
this Plan, in the event that the Committee determines that any dividend or
other distribution (whether in the form of cash, Common Stock, other
securities, or other property, recapitalization, reclassification, stock
split, reverse stock split, reorganization, merger, consolidation,
split-up, spin-off, combination, repurchase, or exchange of Common Stock
or other securities of the Company, issuance of warrants or other rights
to purchase Common Stock or other securities of the Company, or other
similar corporate transaction or event, in the Committee's sole
discretion, affects the Common Stock such that an adjustment is determined
by the Committee to be appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to an award or awards, then the
Committee shall, in such manner as it may deem equitable, adjust the
number and type of shares of Common Stock (or other securities
or property) which may be granted under the Plan (including, but not
limited to, adjustments of the maximum number and kind of shares which may
be issued).
(b) Subject to Section 10(c) but notwithstanding any other term of
this Plan, in the event of any corporate transaction or event described in
paragraph (a) which results in shares of Common Stock being exchanged for
or converted into cash, securities or other property (including securities
of another corporation), the Committee will have the right to terminate
this Plan as of the date of the transaction or event, in which case all
stock grants deferred under Section 7 shall become the right to receive
such cash, securities or other property.
(c) No adjustment or action under this Section 10 or any other
provision of this Plan shall be authorized to the extent such adjustment or
action would violate Section 16 or Rule 16b-3. The number of shares finally
granted under this Plan shall always be rounded to the next whole number.
(d) Any decision of the Committee pursuant to the terms of this
Section 10 shall be final, binding and conclusive upon the participants,
the Company and all other interested parties.
11. Amendment. The Committee may terminate, modify or amend the Plan in
such respect as it shall deem advisable, without obtaining approval from the
Company's stockholders except as such approval may be required pursuant to Rule
16b-3 under the Securities Exchange Act of 1934, as amended, or Section 16 of
such act, provided that the provisions of Sections 4 and 5 of the Plan may not
be amended more than once every six months, other than to comport with changes
in the Internal Revenue Code, the Employee Retirement Income Security Act of
1974, as amended from time to time, or rules thereunder. No termination,
modification or amendment of the Plan may, without the consent of a participant,
adversely affect a participant's rights under an award granted prior thereto.
12. Indemnification. Each person who is or has been a member of the
Committee or who otherwise participates in the administration or operation of
this Plan shall be indemnified by the Company against, and held harmless from,
any loss, cost, liability, or expense that may be imposed upon or incurred by
him or her in connection with or resulting from any claim, action, suit, or
proceeding in which such person may be involved by reason of any action taken or
failure to act under the Plan and shall be fully reimbursed by the Company for
any and all amounts paid by such person in satisfaction of judgment against him
or her in any such action, suit, or proceeding, provided he or she will give the
Company an opportunity, by written notice to the Committee, to defend the same
at the Company's own expense before he or she undertakes to defend it on his or
her own behalf. This right of indemnification shall not be exclusive of any
other rights of indemnification.
The Committee and the Board may rely upon any information furnished by the
Company, its public accountants and other experts. No individual will have
personal liability by reason of anything done or omitted to be done by the
Company, the Committee or the Board in connection with the Plan.
13. Duration of the Plan. The Plan shall remain in effect for a period of
five (5) years from the Effective Date.
14. Expenses of the Plan. The expenses of administering the Plan shall be
borne by the Company.
15. Effective Date. The Plan was originally adopted by Promus's Board of
Directors on April 5, 1995 and by the stockholders of Promus on May 26, 1995.
The Plan will become effective as of the date of the 1996 annual stockholders
meeting (the "Effective Date").
THE PROMUS COMPANIES INCORPORATED
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------------------
Xxxx X. Xxxxxxxx
Vice President
Amendment (this "Amendment") to the
Xxxxxx'x Entertainment, Inc.
1996 Non-Management Directors Stock Incentive Plan
(the "Plan")
This Amendment is effective February 20, 1997, pursuant to approval by the
Committee under the Plan and by the Human Resources Committee of the Board of
Directors of Xxxxxx'x Entertainment, Inc. ("Company").
1. Section 2 of the Plan is hereby amended to add the following sentence
to the end of such section:
Notwithstanding the foregoing, the Human Resources Committee of the Board
of Directors of the Company (the "HRC") shall exercise any and all rights,
duties and powers of the Committee under the Plan to the extent required by the
applicable exemptive conditions of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended ("Rule 16b-3"), as determined by the HRC in its sole
discretion.
2. The third sentence of the first paragraph of Section 7 of the Plan is
hereby amended to read in its entirety:
The deferral election form signed by the participant prior to the plan year
will be irrevocable except in case of hardship (as defined in Section 8) as
determined in good faith by the HRC pursuant to Section 8, provided, however,
that a participant may, prior to January 1 of the year preceding the year that
the participant's termination of service occurs, submit an amended election form
to the HRC for HRC approval indicating a requested change in the participant's
elected method for the grant of the deferred shares upon termination of service
(i.e., as to either a lump sum of shares within 30 days after termination of
service or approximately equal annual installments over a period of two to ten
years), and upon the HRC's approval of the requested change within 90 days after
submission of the requested change, such change shall be effective. If the HRC
does not approve the change, the participant's original election will remain in
effect.
3. Section 8 is hereby amended to add the following sentence to the end
of such section:
For purposes of this Section 8, the Committee shall be the HRC.
4. Section 10(a) of the Plan is hereby amended to add the following
proviso to the end of such section:
; provided, however, that to the extent required by the applicable
exemptive conditions of Rule 16b-3, any such adjustment shall be subject to
approval by the HRC.
5. Section 10(b) of the Plan is hereby amended to add the following
proviso to the end of such section:
; provided, however, that to the extent required by the applicable
exemptive conditions of Rule 16b-3, any such termination shall be subject to
approval by the HRC.
6. Section 10(c) of the Plan is hereby amended to provide in its entirety
as follows:
(c) No adjustment or action under this Section 10 or any other provision
of this Plan shall be authorized to the extent such adjustment or action would
violate Section 16 of the Securities Exchange Act of 1934, as amended, or the
applicable exemptive conditions of Rule 16b-3. The number of shares finally
granted under this Plan shall always be rounded to the next whole number.
7. Section 10(d) of the Plan is hereby amended to add the following
proviso to the end of such section:
; provided, however, that to the extent required by the applicable
exemptive conditions of Rule 16b-3, any such decision shall be subject to
approval by the HRC.
8. Section 11 of the Plan is hereby amended to read in its entirety as
follows:
Amendment. The Committee may terminate, modify or amend the Plan in such
respect as it shall deem advisable, without obtaining approval from the
Company's stockholders or the HRC except as such approval may be required
pursuant to the applicable exemptive conditions of Rule 16b-3 or Section 16 of
the Securities Exchange Act of 1934, as amended. No
termination, modification or amendment of the Plan may, without the consent of a
participant, adversely affect a participant's rights under an award granted
prior thereto.
* * * *
Executed and approved this 20th day of February, 1997.
/s/ Xxxxxx X. Xxxxx
---------------------------------------------
Xxxxxx X. Xxxxx, Chairman, President and
Chief Executive Officer and Sole Member of the Committee
under the Plan
Exhibit B
Indemnity Agreement
-----------------------------
The undersigned, [ ], in consideration
of receiving certain disputed benefit payments pursuant to an Escrow Agreement
dated November 7, 1997, between Xxxxxx'x Entertainment, Inc. (the "Company") and
NationsBank ("Escrow Agent"), hereby agrees to indemnify and hold harmless the
Company and the Escrow Agent from and against any and all losses, damages,
expenses, or claims which may result from any incorrect payment or incorrect
benefit which is made to the undersigned pursuant to a notice delivered by the
undersigned to the Escrow Agent.
Dated:
--------------------------- ------------------------------
Participant
Exhibit C
Private Client Group
0 XxxxxxxXxxx Xxxxx
Xxxxxxxxx, XX 00000-0000
NationsBank
November 24, 1997
Xx. Xxxxx XxXxxxx
General Counsel
Xxxxxx'x Entertainment
0000 Xxxxxx Xxxx
Xxxxxxx, XX 00000-0000
Re: Xxxxxx'x Entertainment Rabbi Trust
Dear Xxxxx:
In consideration of the limitation on our duties as Trustee of the
proposed Xxxxxx'x Entertainment Rabbi Trust, we agree to modify the
enclosed fee schedule by applying a 30% discount to the overall fee.
This discount will remain in effect until such time as we are called
upon to perform additional duties such as calculation of distributions
to beneficiaries. At that time we will charge such additional fees as
are mutually agreed upon between Xxxxxx'x and NationsBank, but at no
time will our fees exceed those contained in the attached fee
schedule.
We thank you for this opportunity to be of service to Xxxxxx'x, and
please feel free to contact me if you have any questions.
Sincerely,
/s/ R. Xxxx Xxxxxx
R. Xxxx Xxxxxx
Vice President
615/749-4406
Trust Services
Schedule of Fees
As your trustee, NationsBank will provide trust management services in addition
to portfolio management, safekeeping of securities, collection and distribution
of interest and dividends, execution of the purchase of sale of securities,
daily cash investment, and periodic investment reports and transaction
statements. These services will be provided to you by one of our professional
advisors in your local office.
Annual Fees on Market Value of Financial Assets
Rate Current Market Value
------ --------------------
1.20% on the first................... $1,000,000
.90% on the next..................... 2,000,000
.70% on the next..................... 2,000,000
.50% on the next..................... 5,000,000
.40% on the balance over............. 10,000,000
The minimum annual market value fee for all assets included in these trust
services is $5,000.
Additional fees, in accordance with published schedules, will apply for tax
return preparation, management and valuation of closely-held business interests,
oil and gas services, note and mortgage services, real estate property
management and distributions. Charges for asset distributions and terminations
will reflect the time, effort and costs involved.
When special or unusual services are required, outside of the published fee
schedules, our fee will include reasonable additional compensation and/or
out-of-pocket expenses based upon the nature of service and the extent of the
duties and responsibility assumed.
Fees are subject to change and are computed and charged monthly.
