1
EXHIBIT 4.5
XXXXXXXX-XXXXX CORPORATION DEFINED CONTRIBUTION PLANS TRUST
2
XXXXXXXX-XXXXX CORPORATION
DEFINED CONTRIBUTION PLANS TRUST
THIS AGREEMENT, made as of October 1, 1996, by and between XXXXXXXX-XXXXX
CORPORATION, a Delaware corporation, with its principal offices at 000 Xxxxxx
Xxxxx, Xxxxxx, Xxxxx 00000 (hereinafter referred to as the "Company"), and
FIRST TRUST NATIONAL ASSOCIATION, a Minnesota corporation, with its principal
offices at 000 Xxxx Xxxxx Xxxxxx, Xxxxx Xxxx, XX 00000 (hereinafter referred to
as the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has adopted the Xxxxxxxx-Xxxxx Corporation Salaried
Employees Incentive Investment Plan, the Xxxxxxxx-Xxxxx Corporation Hourly
Employees Incentive Investment Plan, and the Xxxxxxxx-Xxxxx Corporation
Retirement Contribution Plan (hereinafter referred to individually as the
"Salaried Plan," the "Hourly Plan," and the "Retirement Contribution Plan,
respectively, and collectively as the "Plans") for the exclusive benefit of
such of its eligible employees and eligible employees of its affiliates and
subsidiaries as become participants therein; and
WHEREAS, a Committee (hereinafter referred to as the "IIP Committee") has been
created to administer the Plans pursuant to the terms thereof; and
WHEREAS, the Xxxxxxxx-Xxxxx Tissue Company Investment Plan for Salaried
Employees are merged into the Salaried Plan, and the Xxxxxxxx-Xxxxx Tissue
Company Investment Plan for Hourly Employees are merged into the Hourly Plan,
as of January 1, 1998, and
WHEREAS, the Retirement Trust Committee of the Company (hereinafter referred to
as the "Retirement Trust Committee"), which shall be the named fiduciary for
the Plans, has the authority to direct the investment of assets held under the
Plans; and
WHEREAS, the Company has adopted the Xxxxxxxx-Xxxxx Corporation Salaried
Employees Incentive Investment Plan Trust (the "Salaried Trust") to hold the
assets of the Salaried Plan and the Xxxxxxxx-Xxxxx Corporation Hourly Employees
Incentive Investment Plan Trust (the "Hourly Trust") to hold the assets of the
Hourly Plan; and
WHEREAS, pursuant to delegation of authority from the Chief Executive Officer,
the Retirement Trust Committee appointed First Trust National Association as
successor trustee of the Salaried Trust and the Hourly Trust, effective July 1,
1996; and
WHEREAS, the Retirement Trust Committee, pursuant to delegation of authority
from the Chief Executive Officer of the Company, has determined that the
Salaried Trust and the Hourly Trust shall be merged into a master trust to
hold, collectively, the assets of the Salaried Plan and the Hourly Plan, with
First Trust National Association acting as trustee thereof, effective as of
October 1, 1996; and
WHEREAS, pursuant to the authority granted under the terms of the Retirement
Contribution Plan, the Chief Executive Officer has appointed First Trust
National Association to serve as
3
Trustee of the Retirement Contribution Plan and has authorized the addition of
the Retirement Contribution Plan to the Trust Fund hereunder, effective January
1, 1997; and
WHEREAS, funds have been contributed and additional funds will from time to
time be contributed under the Plans, all of which funds, as and when received
by the Trustee, will constitute a trust fund to be held for the benefit of the
participants under the Plans or their beneficiaries; and
WHEREAS, the Company desires the Trustee to hold, administer, invest and
distribute such funds and the Trustee is willing to hold, manage, administer,
invest and distribute such funds pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the Company and the Trustee do hereby covenant and agree as
follows:
ARTICLE I
Trust Fund
All contributions and other property received by the Trustee in accordance with
the Plans, including the sums of money and other property transferred to the
Trustee, together with the income therefrom and any other increment thereon
(hereinafter referred to as the "Trust Fund") shall be held, managed,
administered, invested, and distributed by the Trustee pursuant to the terms of
this Agreement without distinction between principal and income and without
liability for the payment of interest thereon. The Trustee shall not be
responsible for the collection of any contributions to the Plans.
All transfers to, withdrawals from, and other transactions regarding the Trust
Fund shall be conducted in such a way that the proportionate interest in the
Trust Fund of each Plan and the fair market value of that interest may be
determined at any time. The undivided interest of each Plan shall be debited
or credited, as the case may be, for (i) the entire amount of all contributions
and loan repayments received on behalf of that Plan, all benefit payments, or
expenses attributable solely to that Plan; (ii) its proportionate share of each
item of income, gain or loss, and other expenses; and (ii) other transactions
attributable to the Trust Fund as a whole. As of each date for which the
reports specified in Article IX are provided by the Trustee, the Trustee shall
adjust the value of each Plan's undivided interest in the Trust Fund to reflect
the net increase or decrease in such values since the last such date.
ARTICLE II
Distributions and Participant Loans From Trust Fund
Subject to the provisions of Article III hereof, the Trustee shall from time to
time at the direction of the IIP Committee or the recordkeeper make
distributions and participant loans out of the Trust Fund to such persons,
including the IIP Committee or any member thereof, in such manner, in such
amounts and for such purposes as may be specified in the direction of the IIP
Committee or the recordkeeper, in accordance with those specifications as may
be mutually agreed upon by the Company and the Trustee. All promissory notes
evidencing participant
2
4
loans from the Plans shall constitute assets of the Trust Fund and shall be
held by the Trustee in a separate fund for such participant loans. The IIP
Committee or the recordkeeper shall provide the Trustee with such information
as may from time to time be required for the Trustee to exercise its rights
under the documents evidencing such participant loans, including but not
limited to the occurrence of events of default.
The Trustee shall deduct, withhold and transmit to the proper taxing
authorities any such federal and state tax which it may be permitted or
required to deduct and withhold in accordance with applicable laws, and the
Plan account to be distributed or from which the loan is made in such case
shall be correspondingly reduced. The Trustee shall prepare all necessary
federal and state tax reporting required on any distribution or participant
loan from the Fund, and shall reconcile all federal and state tax withholdings
with each Plan's records, provided that the recordkeeper shall be responsible
for preparing, filing, and furnishing to participants all federal and state tax
statements (i.e., IRS Form 1099-R or other similar tax form) required on any
distribution or participant loan from the Fund, unless otherwise agreed upon in
writing by the parties.
If any payment of benefits directed to be made from the Trust Fund by the
Trustee is not claimed, the Trustee shall notify the Company of that fact
promptly as mutually agreed upon by the Company and the Trustee. The Trustee
shall dispose of such payments as the IIP Committee shall direct. The Trustee
shall not be liable for any payment made by it in good faith without actual
knowledge of the changed status or condition of any recipient thereof.
ARTICLE III
Diversion of Trust Fund
Notwithstanding anything to the contrary contained in this Agreement, or in any
amendment hereto, it shall be impossible for any part of the Trust Fund, other
than such part as is required to pay taxes and administration expenses, to be
used for, or diverted to, purposes other than for the exclusive benefit of the
participants under the Plans or their beneficiaries.
In making a distribution upon a direction as authorized herein, the Trustee may
accept such direction as a certification that such payment complies with the
provisions of this Article and need make no further investigation.
ARTICLE IV
Investment of Trust Fund
Subject to the restrictions set forth in the following paragraphs, the Trustee
shall, in its sole discretion, invest and reinvest the Trust Fund in any
securities or other property or part interest therein, wherever situated,
including specifically obligations or stock of the Company. Such investments
shall not be restricted to property and securities of the character authorized
for investment by trustees under any present or future state laws.
3
5
The Trust Fund shall consist of ten investment funds: the Money Market Fund,
the Stable Income Fund, the Bond Index Fund, the Medium-Term Managed Fund, the
Long-Term Managed Fund, the Stock Index Fund, the Growth Stock Fund, the
International Index Fund, the K-C Stock Fund, and the SMI Stock Fund. The SMI
Stock Fund shall not apply under the Retirement Contribution Plan.
Money Market Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Money Market Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in short-term obligations issued or fully
guaranteed as to the payment of principal and interest by the United States of
America or any agency or instrumentality thereof.
Stable Income Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Stable Income Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in investment contracts issued by legal
reserve life insurance companies, banks, or other financial institutions;
individual or group annuity contracts or insurance policies issued by legal
reserve life insurance companies; money market securities; or any combination
thereof.
Bond Index Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Bond Index Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in obligations issued or fully guaranteed
as to the payment of principal and interest by the United States of America or
any agency or instrumentality thereof, investment grade bonds issued by one or
more corporations domiciled in the United States, asset-backed securities,
mortgage-backed securities, and other similar securities, with the objective to
track the Xxxxxx Brothers Aggregate Bond Index, an unmanaged broad-based index
which is designed to reflect the composition of the United States bond market
and which includes most intermediate and long-term fixed rate bonds in the
United States, or such other similar bond index as may be selected by the
Retirement Trust Committee from time to time.
Medium-Term Managed Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Medium-Term Managed Fund shall be invested at the direction
of the Retirement Trust Committee or the Investment Manager appointed pursuant
to Article VI, directly or through a common or collective trust fund, mutual
fund, or other similar investment facility, in investments in which the Money
Market Fund or Bond Index Fund could invest, as well as a diversified portfolio
of common and preferred stocks of corporations and other issues convertible
into such common and preferred stocks, which may include growth and income,
growth, and/or emerging growth stocks, consistent with the medium-term
investment horizon of the fund.
4
6
Long-Term Managed Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Long-Term Managed Fund shall be invested at the direction of
the Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in investments in which the Bond Index
Fund could invest and money market securities, as well as a diversified
portfolio of common and preferred stocks of corporations and other issues
convertible into such common and preferred stocks, which may include growth and
income, growth, emerging growth, and/or international stocks, consistent with
the long-term investment horizon of the fund.
Stock Index Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Stock Index Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in a diversified portfolio of common and
preferred stocks of corporations and other issues convertible into such common
and preferred stocks, with the objective to track the Standard & Poors (S&P)
500 Stock Index, an unmanaged index which tracks the performance of 500
industrial, transportation, utility, and financial companies whose stocks are
public traded, or such other similar stock index as may be selected by the
Retirement Trust Committee from time to time.
Growth Stock Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Growth Stock Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in common and preferred stocks of medium
to large corporations and other issues convertible into such common and
preferred stocks, which may include securities identified as having above
average growth potential, and in money market securities.
International Index Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the International Index Fund shall be invested at the direction
of the Retirement Trust Committee or the Investment Manager appointed pursuant
to Article VI, directly or through a common or collective trust fund, mutual
fund, or other similar investment facility, in common and preferred stocks of
corporations in Europe, Australia, and the Far East, and other issues
convertible into such common and preferred stocks, with the objective to track
the Xxxxxx Xxxxxxx Capital International EAFE Index, an unmanaged market-value
weighted index of about 1,000 stocks from Europe, Australia, New Zealand, and
the Far East, or such other similar international index as may be selected by
the Retirement Trust Committee from time to time.
K-C Stock Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the K-C Stock Fund, shall be invested in common stock of the
Company, although such may not
5
7
be a legal investment for trustees under state laws applicable hereto, and
short term securities and other similar investments for liquidity. Such stock
shall be acquired by the Trustee in the open market, or from private sources
(other than officers or directors of the Company); whether to acquire such
shares in the open market or to acquire such shares from private sources and
the time and prices and the quantities to be acquired shall be within the sole
discretion of the Trustee. The Trustee may also acquire such shares through
withdrawals, distributions and forfeitures under the Plans, or contributions
of shares from participants (including officers and directors) or the Company
under the Plan; provided, however, that any shares contributed by the Company
shall be from shares held in the treasury of the Company. With respect to the
K-C Stock Fund, the Trustee shall exercise or sell any rights to purchase
shares of common stock of the Company only as directed by the Retirement Trust
Committee. The Trustee shall manage the liquidity of the K-C Stock Fund
consistent with guidelines established by the Retirement Trust Committee and
communicated to the Trustee.
SMI Stock Fund
Funds may be designated by the IIP Committee for investment by the Trustee in
the SMI Stock Fund, subject to the terms and conditions set forth herein. The
SMI Stock Fund shall consist of shares of the common stock of
Xxxxxxxxxx-Xxxxxxx International, Inc., a Delaware corporation ("SMI"),
distributed to the Plans in connection with the pro rata distribution of 100
percent of the outstanding shares of SMI stock to each holder of record of
Company stock on or about November 30, 1995, and such additional shares of SMI
stock acquired by the Trustee through dividends or stock splits declared by
SMI, as well as short term securities and other similar investments for
liquidity. No contributions shall be invested by the Trustee in the SMI Stock
Fund, and no transfers shall be made by the Trustee to the SMI Stock Fund,
unless otherwise directed by the Retirement Trust Committee. Forfeitures under
the Plans with respect to amounts invested in the SMI Stock Fund shall be
invested in the K-C Stock Fund, unless otherwise directed by the Retirement
Trust Committee. To the extent that it becomes necessary to purchase
additional shares of SMI stock to be held in the SMI Stock Fund (e.g., through
reinvestment of interest, dividends or other income or cash received from the
sale of exchange of securities or other property with respect to the SMI Stock
Fund), the Trustee is directed to acquire such stock in the open market, or
from private sources (other than officers or directors of the Company); whether
to acquire such shares in the open market or to acquire such shares from
private sources and the time and prices and the quantities to be acquired shall
be within the sole discretion of the Trustee. The Trustee may also acquire
such shares through withdrawals and distributions under the Plans. The
Trustee shall manage the liquidity of the SMI Stock Funds consistent with
guidelines established by the Retirement Trust Committee and communicated to
the Trustee.
Any monies of the investment funds comprising the Trust Fund may, to facilitate
investment, transfers or distributions hereunder, be invested in short term
securities or in other investments commonly referred to as short-term
investment funds or facilities ("STIF").
The Company shall notify the Trustee of contributions designated for investment
in each of the above investment Funds in accordance with procedures and within
the time periods mutually agreed upon by the Company and the Trustee, and the
Trustee shall notify the Investment Managers of such contributions in
accordance with procedures and within the time periods
6
8
established by the Investment Manager or as mutually agreed upon by the Trustee
and the Investment Manager. The Company shall transfer such contributions to
the Trustee, and the Trustee shall transmit such contributions to the
Investment Managers for investment, in accordance with procedures and within
the time periods mutually agreed upon by the Company and the Trustee, and as
established by the Investment Manager or as mutually agreed upon by the Trustee
and the Investment Manager. It is contemplated that the Trustee will transmit
funds to the Investment Managers for investment on the same business day of
receipt of such funds from the Company, provided that the Company transfers
such funds to the Trustee within the time period mutually agreed upon by the
Company and the Trustee.
The Trustee is further authorized to hold, for the purpose of administration or
distribution thereof, a portion of the Trust Fund uninvested whenever and for
so long as is required for the payment in cash of Plans accounts normally
expected to mature in the near future; to hold uninvested reasonable amounts of
cash whenever it is deemed advisable to do so to facilitate disbursements,
pending investments or for other operational reasons; and to deposit the same,
without any liability for interest earned thereon, in the banking department of
any corporate Trustee serving hereunder or of any other bank, trust company or
other financial institution including those affiliated in ownership with the
Trustee, notwithstanding the banking department's or other affiliate's receipt
of "float" from such uninvested cash.
All interest, dividends or other income as well as any cash received from the
sale or exchange of securities or other property, produced by each such
investment fund shall be reinvested in the same investment fund which produced
such interest, dividends and other income.
The Trustee shall make transfers among the investment funds in accordance with
the directions of the IIP Committee pursuant to participant direction and may
dispose of such investments in any of the investment funds as may be necessary
to enable it to make any such transfers.
The Retirement Trust Committee shall have the authority to terminate an
investment Fund, to direct that an investment Fund be established, to appoint
or terminate the Investment Manager for a fund pursuant to Article VI hereof,
to withdraw or limit participation in a particular investment Fund, and to
consolidate any separate investment Fund with any other separate investment
Fund having the same investment objectives which are established under any
other retirement plan or trust of the Company or its affiliates and which are
managed by the same Investment Manager, provided that the records of the
Trustee shall reflect the relative interests of the separate trusts in such
commingled fund.
ARTICLE V
Powers and Authority of Trustee
Subject to the provisions set forth in Article IV, this Article V, and Article
VI, the Trustee shall have full power and authority in its sole discretion, to
do all acts and to exercise any and all
7
9
powers which would be lawful for it were it in its own right the actual owner
of the Trust Fund, including by way of illustration, but not limitation, the
following:
5.1 To purchase or subscribe for any securities or other property and to
retain in trust such securities or other property, including but not limited to
securities of the Company which are "qualifying employer securities" within the
meaning of section 407(d)(5) of the Employee Retirement Income Security Act of
1974, as amended from time to time ("ERISA"), which are held in the K-C Stock
Fund;
5.2 To sell for cash or on credit, to grant options, convert, redeem, exchange
for other securities or other property, or otherwise to dispose of any
securities or other property at any time held by it.
5.3 To settle, compromise or submit to arbitration, any claims, debts or
damages, due or owing to or from the Trust, to commence or defend suits or
legal proceedings and to represent the Trust in all suits or legal proceedings,
provided that the Trustee shall be indemnified against all reasonable expenses
and liabilities sustained by it by reason thereof (including reasonable
attorneys' fees).
5.4 To exercise any conversion privileges and/or subscription right available
in connection with any securities or other property at any time held by it; to
oppose or to consent to the reorganization, consolidation, merger, or
readjustment of the finances of any corporation, company or association or to
the sale, mortgage, pledge or lease of the property of any corporation, company
or association any of the securities of which may at any time be held by it and
to do any act with reference thereto, including the exercise of options, the
making of agreements or subscriptions and the payment of expenses, assessments
or subscriptions, which may be deemed necessary or advisable in connection
therewith, and to hold and retain any securities or other property which it may
so acquire.
5.5 To enter into a line of credit or establish a credit facility with, or
borrow money from, any lender in such amounts and upon such terms and
conditions as shall be deemed advisable or proper to carry out the purposes of
the Trust, and to pledge any securities or other property for the repayment of
such loan.
5.6 To employ suitable agents, experts and counsel (which may be counsel to
the Company) and to pay their reasonable expenses and compensation in
accordance with the provisions of Article VII. The Trustee may act in reliance
upon the advice, opinions, records, statements, and computations of any agents,
experts and counsel, and shall be fully protected in relying in good faith on
such advice, opinions, records, statements and computations, except to the
extent provided otherwise under ERISA.
5.7 To register any securities held by it hereunder in its own name or in the
name of a nominee with or without the addition of words indicating that such
securities are held in a fiduciary capacity and to hold any securities in
bearer form.
8
10
5.8 To form corporations and to create trusts to hold title to any securities
or other property, all upon such terms and conditions as may be deemed
advisable.
5.9 To make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, contracts, waivers, releases or other instruments in
writing necessary or proper for the accomplishment of any of the foregoing
powers.
5.10 Except as provided in Sections 5.13 and 5.14, to exercise, personally or
by general or by limited power of attorney, any right, including the right to
vote, appurtenant to any securities or other property held by it at any time.
5.11 Only when and if so directed by the Retirement Trust Committee or the
Investment Manager appointed pursuant to Article VI, to purchase from legal
reserve life insurance companies individual and group annuity contracts and
insurance policies of such kind and in such amount as the Retirement Trust
Committee or the Investment Manager in its discretion may deem proper for the
purposes of the Stable Income Fund, and to use funds of the Stable Income Fund
to maintain such contracts and policies in force. Title to and all rights and
privileges under such annuity contracts and insurance policies shall be vested
in the Trustee. The Trustee shall have no duty to inquire into the terms and
provisions of any such annuity contracts and insurance policies purchased by it
upon the direction of the Retirement Trust Committee or the Investment Manager.
5.12 To transfer, at any time and from time to time, such part or all of the
investments Funds designated in Article IV to any trust which is invested in
property of the kind specified for the respective investment funds, and which
is qualified under Section 401(a) and exempt from tax under Section 501(a) of
the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
maintained as a medium for the collective investment of funds of pension,
profit sharing or other employee benefit trusts, whether maintained by the
Trustee or any Investment Manager, including but not limited to (i) THE PLANS
AND DECLARATION OF TRUST - FIRST TRUST NATIONAL ASSOCIATION COLLECTIVE AND
POOLED INVESTMENT FUNDS FOR EMPLOYEE BENEFIT TRUSTS, (ii) 1995 AMENDED AND
RESTATED DECLARATION OF TRUST - AMERICAN EXPRESS TRUST COLLECTIVE INVESTMENT
FUNDS FOR EMPLOYEE BENEFIT TRUSTS, and (iii) such collective investment trust
maintained by BARCLAYS GLOBAL INVESTORS, N.A., as amended from time to time,
and to withdraw any part or all of the Trust Fund so transferred. The
provisions of any such declaration of trust shall be deemed to be a part of
this Agreement.
5.13 The Trustee shall vote the common stock of SMI held by the Trustee in the
SMI Stock Fund. The Trustee shall also respond to a tender or exchange offer
for any or all shares of SMI stock held by the Trustee in the SMI Stock Fund.
5.14 The Trustee shall vote the common stock of the Company held in the K-C
Stock Fund, only in accordance with the directions of the IIP Committee. In
the event that the IIP Committee informs the Trustee in writing that it is not
able to direct the Trustee as to the voting of any non-directed shares of
common stock of the Company held in the K-C Stock Fund for
9
11
which direction has not been received from participants for any reason, then
the Trustee shall vote such shares in the same manner and proportion as the
shares of common stock of the Company with respect to which it received
direction from participants. Each participant under the Plans (or in the
event of his death, his beneficiary) shall have the right to direct the Trustee
in writing how to respond to a tender or exchange offer for any or all whole
shares of common stock of the Company held by the Trustee and attributable to
his accounts in the K-C Stock Fund as of the last day of the month preceding
such offer. The IIP Committee shall notify each participant (or beneficiary)
and exert its best efforts to timely distribute or cause to be distributed to
him such information as will be distributed to stockholders of the Company in
connection with any such tender or exchange offer. Upon timely receipt of such
instructions, the Trustee shall tender such shares of common stock of the
Company as and to the extent so instructed. If the Trustee shall not receive
instructions from a participant (or beneficiary) regarding any such tender or
exchange offer for such shares of common stock of the Company, such participant
or beneficiary shall be deemed to have timely instructed the Trustee not to
tender or exchange such shares, and the Trustee shall have no discretion in
such matter and shall take no action with respect thereto. With respect to
shares of common stock of the Company in the K-C Stock Fund for which the
Trustee is not subject to receiving such instruction, whether because such
shares are unallocated or as otherwise provided by the Plans or by law, the
Trustee shall tender such shares in the same ratio as the number of shares for
which it receives instructions to tender bears to the total number of shares
for which it is subject to receiving instructions, and shall have no discretion
in such matter and shall take no action with respect thereto other than as
specifically provided in this sentence. The instructions received by the
Trustee from participants shall be held by the Trustee in strict confidence and
shall not be divulged or released to any person, including employees, officers
and directors of the Company; provided, however, that to the extent necessary
for the operation of the Plans, such instructions may be released by the
Trustee to a recordkeeper, auditor or other person providing services to the
Plans.
The Trustee in the acquisition, disposition and management of investments for
or under the Trust may acquire and hold any securities or other property even
though the Trustee, in its individual or any other capacity, shall have
invested or may thereafter invest, its own or other funds in the same or
related securities or other property, the interest, principal or other avails
of which may be payable at different rates or different times or may have a
different rank or priority; and may acquire and hold any securities or other
property even though in connection therewith the Trustee, in its individual or
any other capacity, may receive compensation reasonably and customarily due in
the course of its regular activities; and may make investments even though the
proceeds thereof may directly or indirectly be used to pay off loans made by
the Trustee in its individual capacity.
ARTICLE VI
Company Directed or Investment Manager Accounts
Notwithstanding anything in this Agreement to the contrary, the Retirement
Trust Committee or any Investment Manager appointed by the Retirement Trust
Committee shall have the right from time to time to direct the Trustee with
respect to the acquisition, retention, management
10
12
and disposition of the assets from time to time comprising the Trust Fund (such
assets so acquired to be referred to as the "Company Directed" or "Investment
Manager Accounts"). The Trustee shall follow all such directions of the
Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee and shall have no duty or obligation to review the
assets from time to time so acquired, nor to make any recommendations with
respect to the investment, reinvestment or retention thereof. Except as
otherwise provided in section 5.13 and 5.14 of Article V of this Agreement, the
Trustee shall vote the proxies thereon as directed by the Retirement Trust
Committee for Company Directed Accounts or any Investment Manager appointed by
the Retirement Trust Committee for Investment Manager Accounts. With respect
to Company Directed or Investment Manager Accounts, the Trustee shall have no
liability to the Company, administrative committee or other authorized person,
or any Participant or Beneficiary under the Trust for acting without question
on the direction of, or for failure to act in the absence of directions from,
the Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee, as applicable. The Trustee shall be indemnified
and held harmless from and against any and all liability or expense to which
the Trustee shall be subjected by reason of carrying out any directions of the
Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee made pursuant to this paragraph, including all
expenses reasonably incurred in its defense if the Company fails to provide
such defense.
Notwithstanding the foregoing provisions, the Trustee, at the direction of the
Retirement Trust Committee or the Investment Manager appointed by the
Retirement Trust Committee, shall have the power, right and authority to invest
cash balances held by it from time to time which are part of the funds managed
by the Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee in investments commonly referred to as short-term
investment funds of facilities ("STIF"), and the Trustee, without prior
approval or direction, shall have the power, right and authority to sell such
short-term investments as may be necessary to carry out the instructions of the
Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee with respect to investing the funds managed by the
Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee. In addition, pending receipt of the directions
from the Retirement Trust Committee, or any Investment Manager appointed by the
Retirement Trust Committee, reasonable amounts of cash received by the Trustee
may be retained by the Trustee, in its discretion, in cash, without any
liability for interest for any funds managed by the Retirement Trust Committee
or any Investment Manager appointed by the Retirement Trust Committee.
ARTICLE VII
Taxes and Expenses of Administration
The expenses incurred by the Trustee in the performance of its duties,
including fees for legal services rendered to the Trustee and other expenses
described in Section 5.6 hereof, such compensation to the Trustee as may be
agreed upon in writing from time to time between the Company and the Trustee
and all other proper charges and disbursements of the Trustee, shall be paid
from the Trust Fund in accordance with procedures as are mutually agreed upon
by the Company and the Trustee, unless paid by the Company and until so paid
shall constitute a charge upon the Fund. Brokerage fees and other direct costs
of investment shall
11
13
be paid by the Trustee out of the Fund to which such costs are attributable.
All taxes of any and all kinds whatsoever, including interest and penalties,
that may be levied or assessed under existing or future laws upon or in respect
of any of the Funds or the income thereof shall be paid from the respective
Fund.
Notwithstanding the provisions of Article II hereof, all payments under this
Article VII may be made without the approval or direction of the IIP Committee.
ARTICLE VIII
Valuation of Accounts
The Trustee shall value each investment Fund as of the close of each business
day (the "Valuation Date"), which valuation shall reflect the then fair market
value of the assets comprising such investment Fund (including income
accumulations therein). A "business day" shall mean a day in which securities
are traded on the New York Stock Exchange. In making such valuations, the
Trustee may rely on information supplied by any Investment Manager having
investment responsibility over the particular investment Fund, provided however
that the Trustee shall be responsible for valuing the K-C Stock Fund and the
SMI Stock Fund. The Trustee shall adjust those values provided by each
Investment Manager in accordance with procedures which have been mutually
agreed upon by the Company and the Trustee to include those Plan expenses
(exclusive of investment management and brokerage fees which are applied by the
Investment Manager appointed pursuant to Article VI) which are to be charged to
the Trust, if any, as designated by the Company, and taking into account any
revenue sharing amounts applicable to an investment Fund. The Trustee shall
timely transmit the value of each investment Fund on each Valuation Date to the
Company and the recordkeeper. The Trustee shall promptly notify the Company
and the Plan's recordkeeper of any error which shall have occurred in the
valuation of an investment Fund (regardless of whether such error may be
considered material) and, upon notice to the Company, shall promptly correct
such error in accordance with procedures which have been mutually agreed upon
by the Trustee and the Company.
12
14
ARTICLE IX
Accounts of the Trustee
The Trustee shall keep accurate and detailed accounts of all investments,
receipts, disbursements and other transactions hereunder and such other records
as the Company shall from time to time direct, and all accounts, books, and
records relating thereto shall be open to inspection and audit at all
reasonable times by any person designated by the Retirement Trust Committee or
the Company. The Trustee shall file with the Retirement Trust Committee, the
Company, and the Plan's recordkeeper from time to time such reports as may be
required for the administration of the Plans. No person other than the Company
or the Retirement Trust Committee may require an accounting.
ARTICLE X
Reliance on Certificates; Liability of Trustee
The Trustee shall be fully protected in relying upon a certification of the
Retirement Trust Committee with respect to any instruction, direction or
approval of the Retirement Trust Committee, and upon a certification by a
member of the IIP Committee with respect to any instruction, direction or
approval of the IIP Committee, and protected also in relying upon a
certification of the Company as to the membership of the Retirement Trust
Committee or the IIP Committee as it then exists and as to the authority of any
person authorized to act for the Retirement Trust Committee or the IIP
Committee, and in continuing to rely upon such certification until a subsequent
certification is filed with the Trustee.
The Trustee shall be fully protected in acting upon any instrument,
certificate, or paper believed by it to be genuine and to be signed or
presented by the Retirement Trust Committee or the IIP Committee or any person
or entity designated in writing by the Retirement Trust Committee or the IIP
Committee, and the Trustee shall be under no duty to make any investigation or
inquiry as to any statement contained in any such writing but may accept the
same as conclusive evidence of the truth and accuracy of the statements therein
contained.
The Trustee shall not be responsible for the proper application of any part of
the Trust Fund if distributions are made in accordance with the written
directions of the IIP Committee as herein provided, shall not be under any duty
to make inquiries as to whether any distribution directed by the IIP Committee
is made pursuant to the provisions of the Plans, and shall not be responsible
for the adequacy of the Trust Fund to meet and discharge any and all
distributions and liabilities under the Plans. All persons dealing with the
Trustee are released from inquiry into the decision or authority of the Trustee
and from seeing to the application of any moneys, securities or other property
paid or delivered to the Trustee.
No Trustee, or member of the Retirement Trust Committee or member of the IIP
Committee shall be liable hereunder except for his or its failure to exercise
the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and
13
15
with like aims. Nothing contained herein shall preclude any member of the
Retirement Trust Committee or any member of the IIP Committee from any
indemnification to which he, they or it may be entitled under the Company's
By-Laws or otherwise. No Trustee shall be or become liable for any act or
omission of a prior Trustee serving hereunder, it being the purpose and intent
that each Trustee shall be liable only for the Trustee's own acts or omissions
during the Trustee's term of service as Trustee hereunder, except to the extent
that liability is imposed under ERISA.
Except as prohibited by law, the Trustee shall be held harmless and indemnified
by the Company from and against any and all liabilities, costs, and expenses
(including legal fees reasonably incurred by the Trustee in its defense)
arising out of any action taken by such Trustee with respect to the Plans or
the Fund in carrying out any direction of the Company, the Retirement Trust
Committee, the IIP Committee, or other authorized person made in accordance
with this Agreement, provided that the Trustee has used reasonable care in
carrying out such direction. This indemnification shall continue as to the
Trustee after such Trustee ceases to be a Trustee.
The Trustee shall take any and all actions necessary and appropriate to correct
any error with respect to the Fund promptly upon discovery or notification of
such error, including but not limited to, reimbursement of the Fund or the
Company for the cost of correcting such error where the error is caused by the
Trustee's failure to use reasonable care in the performance of its duties under
this Agreement and under procedures mutually agreed upon by the Company and the
Trustee under this Agreement. The Trustee shall use reasonable diligence to
identify any errors with respect to the Fund and shall promptly notify the
Company and the Plan's recordkeeper of such error (regardless of whether the
error might be considered material).
ARTICLE XI
Trustee: Removal, Resignation, Successor, etc.
The Trustee may be removed by the Chief Executive Officer of the Company at any
time upon thirty days' notice in writing to the Trustee and the Company,
provided that the Trustee may agree to a shorter period. The Trustee may
resign at any time upon sixty days' notice in writing to the Company and the
IIP Committee, provided that the Company and the Retirement Trust Committee may
agree to a shorter period. Upon such removal or resignation of the Trustee,
the Chief Executive Officer of the Company shall appoint a successor trustee or
trustees and, upon acceptance of such appointment by the successor trustee or
trustees, the Trustee shall assign, transfer, pay over and deliver to such
successor trustee or trustees the funds and properties then constituting the
Trust Fund.
14
16
ARTICLE XII
Amendments
Subject to the first paragraph of Article III, this Agreement may be amended by
the Board of Directors of the Company or the Retirement Trust Committee at any
time or from time to time and in any manner, and the provisions of any such
amendment may be made applicable to the Trust Fund as constituted at the time
of the amendment as well as to the part of the Trust Fund subsequently
acquired; provided, however, that no such amendment shall increase the duties
or change the compensation of the Trustee without its consent. Any such
amendment shall be by a written instrument delivered to the Trustee.
Any action permitted to be taken by the Board of Directors of the Company or
the Retirement Trust Committee under the foregoing provision may be taken by
the IIP Committee if such action
(1) is required by law, or
(2) is required by an action of the IIP Committee pursuant to the
Plans, or
(3) is estimated not to increase the annual cost of the Plans by
more than the amounts set forth in the Plans.
Any action taken by the Board or IIP Committee shall be made by or pursuant to
a resolution duly adopted by the Board or IIP Committee and shall be evidenced
by such resolution or by a written instrument executed by such persons as the
Board or IIP Committee shall authorize for such purpose.
The IIP Committee shall report to the Chief Executive Officer of the Company by
January 31 of each year all action taken by it hereunder during the preceding
calendar year.
ARTICLE XIII
Termination
This Agreement and the Trust created hereby may be terminated at any time by
the Board of Directors of the Company or the Retirement Trust Committee and
upon such termination or upon the dissolution or liquidation of the Company, or
in the event that a successor to the Company by operation of law or by the
acquisition of its business interests shall not elect to continue the Plans and
this Trust, or a successor Trust, the Trust Fund shall be paid out by the
Trustee as and when directed by the IIP Committee in accordance with the
provisions of Article II hereof. Upon termination of this Trust the Trustee
shall first reserve such reasonable amount as it may deem necessary to provide
for the payment of any expenses or fees then or thereafter chargeable against
the Trust Fund.
15
17
ARTICLE XIV
Governing Law; Interpretation
To the extent not prevented by law, this Agreement and the Trust created hereby
shall be construed, regulated and administered under the laws of the State of
Minnesota. The Trustee may at any time initiate an action or proceedings for
the settlement of its accounts or for the determination of any questions of
construction which may arise or for instructions, and the only necessary
parties defendant to such action shall be the Company and the IIP Committee,
except that the Trustee may, if it so elects, bring in as parties defendant any
other person or persons.
Whenever appropriate, words used herein in the singular may be read in the
plural, or words used herein in the plural may be read in the singular; the
masculine may include the feminine; and the words "hereof," "herein" or
"hereunder" or other similar compounds of the word "here" shall mean and refer
to the entire Agreement and not to any particular paragraph or section of this
Agreement unless the context clearly indicates to the contrary. The titles
given to the various sections of this Agreement are inserted for convenience of
reference only and are not part of this Agreement, and they shall not be
considered in determining the purpose, meaning or intent of any provision
hereof. Any reference in this Agreement to a statute or regulation shall be
considered also to mean and refer to any subsequent amendment or replacement of
that statute or regulation.
ARTICLE XV
Segregation of Trust Fund
Any company which is a subsidiary of the Company may, with the approval of the
Board of Directors of the Company by resolution of its own Board of Directors
adopt the Trust if such subsidiary shall have adopted the Plans.
Any such subsidiary may at any time segregate from further participation in the
Trust under this Trust Agreement. Such subsidiary shall file with the Trustee
a document evidencing its segregation from the Trust Fund and its continuance
of a trust in accordance with the provisions of the Trust Agreement as though
such subsidiary were the sole creator thereof. In such event, the Trustee
shall deliver to itself as Trustee of such Trust such part of the Trust Fund as
may be determined by the IIP Committee to constitute the appropriate share of
the Trust Fund then held in respect of the participating members of such
subsidiary. Such former subsidiary may thereafter exercise in respect of such
Trust Agreement all the rights and powers reserved to the Company, to the
Retirement Trust Committee and to the IIP Committee under the provisions of
this Trust Agreement.
In a similar manner, the appropriate share of the Trust Fund determined by the
IIP Committee to be then held in respect of employees in any division, plant,
location or other identifiable group or unit of the Company or of any
subsidiary may be segregated, and the Trustee shall hold such segregated assets
in the same manner and for the same purpose as provided
16
18
above in the event of segregation of a subsidiary and the Company or any
successor owner of the segregated unit shall have the rights hereinabove
provided for a segregated subsidiary.
The Trustee may, as directed by the IIP Committee, transfer such assets and
liabilities of the Trust as determined by the IIP Committee relating to a
division, plant, location or other identifiable group or unit of the Company or
of any subsidiary, to a trust which is exempt from tax under Section 501(a) of
the Code, as constituting a part of a plan intended to qualify under Section
401(a) of the Code.
ARTICLE XVI
Name of Trust
This Trust shall be known as the "Xxxxxxxx-Xxxxx Corporation Defined
Contribution Plans Trust."
ARTICLE XVII
Miscellaneous
Any action required or permitted to be taken hereunder by the Board of
Directors of the Company may be taken by the Compensation Committee of the
Board of Directors or any other duly authorized committee of the Board of
Directors designated under the By-Laws of the Company. Any action required or
permitted to be taken hereunder by the Company may be taken by any officer of
the Company. The Trust is intended to be tax exempt under Section 501(a) as
constituting a part of a plan intended to qualify under Section 401(a)
respectively, of the Code, and to satisfy the requirements of the ERISA, as
these laws may be amended from time to time. Until advised otherwise, the
Trustee may conclusively assume that the Plans is qualified under Section
401(a) of the Code, and that this Trust is exempt from federal income tax.
Neither the creation of this Trust nor anything contained in this Agreement
shall be construed as giving any person entitled to benefits hereunder or other
employee of the Company any equity or other interest in the Trust Fund or in
the assets, business, or affairs of the Company.
Neither the Trustee, the Retirement Trust Committee, the IIP Committee, the
Company, nor any of its officers, employees, agents, or members of the Board of
Directors in any way guarantees the Trust Fund against loss or depreciation nor
do they guarantee the payment of any benefit or amount which may become due and
payable to any Participant or Beneficiary hereunder.
The Company shall deliver to the Trustee a copy of the Plans and of any
amendments thereto for convenience of reference, and the rights, powers and
duties of the Trustee shall be governed only by the terms of this Trust
Agreement without reference to the provisions of the Plans.
17
19
All contributions to the Trust shall be deemed to take place in the State of
Minnesota. No contribution shall be subject to process either before or after
it is received by the Trustee.
ARTICLE XVIII
Execution
This Agreement shall be executed in any number of counterparts, each one of
which shall be deemed to be the original although the others shall not be
produced.
IN WITNESS WHEREOF, XXXXXXXX-XXXXX CORPORATION and FIRST TRUST NATIONAL
ASSOCIATION have caused this Agreement to be executed by their duly authorized
officers as of the day and year first above written.
XXXXXXXX-XXXXX CORPORATION
[S]
By:
------------------------------------
L. Xxxxxx Xxxxxxx
Assistant Treasurer
FIRST TRUST NATIONAL ASSOCIATION
By:
------------------------------------
Xxxxxx X. Xxxxxx
Vice President
By:
------------------------------------
Xxxxx X. Xxxxxxx
Vice President
18
