Exhibit 10.12
FIRST MARYLAND BANCORP
1994 DEFERRED COMPENSATION PLAN
FOR DIRECTORS AND SENIOR OFFICERS
TRUST AGREEMENT
This Trust Agreement, effective January 1, 1994, by and between First
Maryland Bancorp, a corporation organized under the laws of Maryland (the
"Company") and PNC Bank, N.A., a national banking association organized under
the laws of the United States of America (the "Trustee");
W I T N E S S E T H:
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WHEREAS, Company has adopted a nonqualified deferred compensation plan
known as the First Maryland Bancorp 1994 Deferred Compensation Plan for
Directors and Senior Officers (hereinafter referred to as the "Plan");
WHEREAS, the Plan provides for the Company to pay all benefits from its
general revenues and assets;
WHEREAS, Company wishes to establish a trust (hereinafter called "Trust")
and to contribute to the Trust assets that shall be held and invested therein
(subject to the claims of Company's creditors in the event of Company's
Insolvency, as herein defined) until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plan
as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of the Employee Retirement Income Security Act of 1974;
WHEREAS, it is the intention of Company to make contributions to the Trust
to provide itself with a source of funds to assist it in the meeting of its
liabilities 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:
ARTICLE I
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ESTABLISHMENT
1.1 Company will deposit with Trustee in trust such sums of money and
other property as from time to time it deems necessary. Such amounts shall
become the principal of the Trust to be held, administered and disposed of by
Trustee as provided in this Trust Agreement.
1.2 The Trust hereby established shall be irrevocable.
1.3 The Trust is intended to be a grantor trust, of which Company is
the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
1.4 The principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of Plan participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred claim
on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company's general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3.1.
1.5 Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.
ARTICLE II
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PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
2.1 Company shall deliver to Trustee a schedule (the "Payment Schedule")
that indicates the amounts payable in respect of each Plan participant (and his
or her beneficiaries), that provides a formula or other instructions acceptable
to Trustee for determining the amounts so payable, the form in which such amount
is to be paid (as provided for or available under the Plan), and the time of
commencement for payment of such amounts. Except as otherwise provided herein,
Trustee shall make payments to the Plan participants and their beneficiaries in
accordance with such Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes that may be
required to be withheld with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported, withheld and paid
by Company.
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2.2 The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Company or such party as it shall
designate under the Plan, and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.
2.3 Company may make payment of benefits directly to Plan participants
or their beneficiaries as they become due under the terms of the Plan. Company
shall notify Trustee of its decision to make payment of benefits directly prior
to the time amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust and any earnings thereon are not
sufficient to make payments of benefits in accordance with the terms of the
Plan, Company shall make the balance of each such payment as it falls due.
Trustee shall notify Company where principal and earnings are not sufficient.
ARTICLE III
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TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT
3.1 Trustee shall cease payment of benefits to Plan participants and
their beneficiaries if the Company is Insolvent. Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) Company is unable to pay
its debts as they become due, or (ii) Company is subject to a pending proceeding
as a debtor under the United States Bankruptcy Code.
3.2 At all times during the continuance of this Trust, as provided in
Section 1.4 hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.
3.3 The Board of Directors and the Chief Executive Officer of Company
shall have the duty to inform Trustee in writing of Company's Insolvency. If a
person claiming to be a creditor of Company alleges in writing to Trustee that
Company has become Insolvent, Trustee shall determine whether Company is
Insolvent and, pending such determination, Trustee shall discontinue payment of
benefits to Plan participants or their beneficiaries.
3.4 Unless Trustee has actual knowledge of Company's Insolvency, or has
received notice from Company or a person claiming to be a creditor alleging that
Company is Insolvent, Trustee shall have no duty to inquire whether Company is
Insolvent. Trustee may in all events rely on such evidence concerning Company's
solvency as may be furnished to Trustee and that provides Trustee with a
reasonable basis for making a determination concerning Company's solvency.
3.5 If at any time Trustee has determined that Company is Insolvent,
Trustee shall discontinue payments to Plan participants or their beneficiaries
and shall hold the assets of the
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Trust for the benefit of Company's general creditors. Nothing in this Trust
Agreement shall in any way diminish any rights of Plan participants or their
beneficiaries to pursue their rights as general creditors of Company with
respect to benefits due under the Plan or otherwise.
3.6 Trustee shall resume the payment of benefits to Plan participants or
their beneficiaries in accordance with Article II of this Trust Agreement only
after Trustee has determined that Company is not Insolvent (or is no longer
Insolvent).
3.7 Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3.2 hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by Company in lieu of the payments provided
for hereunder during any such period of discontinuance.
ARTICLE IV
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INVESTMENT AUTHORITY
4.1 Subject to the provisions of Section 4.2, the Trustee shall have the
following powers, the exercise of which shall be within the sole and absolute
discretion of the Trustee:
(i) The Trustee shall keep the Trust invested, without
distinction between principal and income, in any property, whether real,
personal or mixed, and wherever situated and whether or not productive of
income, without regard to the proportion any such property may bear to the
entire amount of the Trust. The Trust investments may include, without implied
limitation, American Depository Receipts relating to the common stock of Allied
Irish Bank.
(ii) The Trustee in its discretion may keep such portion of the
Trust in cash or cash balances or hold all or any portion of the Trust in
savings accounts, certificates of deposit, and other types of time or demand
deposits with any appropriate financial institution or quasi-financial
institution (including any such institution operated or maintained by the
Trustee in its corporate capacity) as the Trustee may from time to time
determine to be in the best interests of the Trust.
4.2 The Company shall have the right to request the Trustee invest and
reinvest the principal and income of the Trust as directed by the Company;
provided, however, that the Trustee shall not be required to comply with such a
request and, in any event, the Trustee shall only comply with the Company's
request if the Trustee determines in its own judgment that the Company's
directions are reasonable. In no event shall a Participant have the right to
request or require the Trustee to make any particular investment of the
principal or income of the Trust.
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4.3 Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by Company. All rights associated with
assets of the Trust shall be exercised by Trustee or the person designated by
Trustee, and shall in no event be exercisable by or rest with Plan Participants.
4.4 Company shall have the right at any time, and from time to time in
its sole discretion, to substitute assets of equal fair market value for any
asset held by the Trust. This right is exercisable by Company in a nonfiduciary
capacity without the approval or consent of any person in a fiduciary capacity.
ARTICLE V
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DISPOSITION OF INCOME
5.1 During the term of this Trust, all income received by the Trust, net
of expenses and taxes, shall be accumulated and reinvested.
ARTICLE VI
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ACCOUNTING BY TRUSTEE
6.1 The Trustee shall keep or cause to be kept accurate and detailed
accounts of any investments, receipts, disbursements and other transactions
hereunder, 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
Company. All such accounts, books and records shall be preserved (in original
form, or on microfile, magnetic tape or any other similar process) for such
period as the Trustee may determine, but the Trustee may only destroy such
accounts, books and records after first notifying the Company in writing of its
intention to do so and transferring to the Company any of such accounts, books
and records requested.
6.2 The Trustee shall file with the Company at least quarterly a
statement showing transactions and market values of the Trust in the normal form
provided to the Trustee's customers. Upon the expiration of 180 days from the
date of filing any such statement, the Trustee shall be released and discharged
from all liability and accountability with respect to the propriety of its acts
and transactions shown in such statement, except with respect to any such acts
or transactions as to which the Company shall within such 180 day period file
with the Trustee written objections and except for matters which the Company
would not reasonably have been expected to have discovered by a proper review of
such statement.
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6.3 The Trustee shall from time to time permit the Company's employees
and agents to have reasonable access during ordinary business hours to such
records as may be necessary to audit the Trustee's accounts.
6.4 Nothing contained in this Trust Agreement shall be construed as
depriving the Trustee or the Company of the right to have a judicial settlement
of the Trustee's accounts, and upon any proceeding for a judicial settlement of
the Trustee's accounts or for instructions, the only necessary party thereto in
addition to the Trustee shall be the Company.
6.5 In the event of the removal or resignation of the Trustee, the
Trustee shall deliver to the successor trustee all records which shall be
required by the successor trustee to enable it to carry out the provisions of
this Trust Agreement.
6.6 The Trustee will execute and file appropriate tax returns and
reports relating to withholding taxes or other charges or taxes as directed by
the Company. In addition to any returns required of the Trustee by law, the
Trustee shall prepare and file such tax reports and other returns as the Company
and the Trustee may from time to time agree.
ARTICLE VII
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RESPONSIBILITY OF TRUSTEE
7.1 Trustee shall act with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent person acting in like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character and with like aims, provided, however, that Trustee shall incur
no liability to any person for any action taken pursuant to a direction, request
or approval given by Company which is contemplated by, and in conformity with,
the terms of the Plan or this Trust and is given in writing by Company. In the
event of a dispute between Company and a party, Trustee may apply to a court of
competent jurisdiction to resolve the dispute.
7.2 The Trustee shall have the following additional powers and
authority, subject to Sections 4.1, 4.2 and 4.3, the exercise of which shall be
within the sole and absolute discretion of the Trustee unless otherwise stated
with respect to all property constituting part of the Trust:
(i) To sell, lease (irrespective of the possible termination of
the Trust), improve, partition, mortgage, exchange or otherwise dispose of any
and all property at any time forming a part of any Trust in such manner, for
such purposes and upon such terms as the Trustee may deem desirable.
(ii) To participate in any plan of reorganization, consolidation,
merger, combination, liquidation or other similar plan relating to any such
property, and to consent to or
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oppose any such plan or any action thereunder, or any contract, lease, mortgage,
purchase, sale or other action by any corporation or other entity.
(iii) To deposit any such property with any protective,
reorganization or similar committee; to delegate discretionary power to any such
committee; and to pay part of the expenses and compensation of any such
committee and any assessments levied with respect to any property so deposited.
(iv) To exercise any conversion privilege or subscription right
available in connection with any such property; 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 in the Trust 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.
(v) To commence or defend suits or legal proceedings and to
represent the Trust in all suits or legal proceedings; to settle, compromise or
submit to arbitration any claims, debts or damages due or owing to or from the
Trust.
(vi) To exercise, personally or by general or limited power of
attorney, any right, including the right to vote, appurtenant to any securities
or other such property.
(vii) To 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 any such loan.
(viii) To engage any legal counsel, including counsel to the
Company or to the Trustee, or any other suitable agents, to consult with such
counsel or agents with respect to the construction of this Trust Agreement, the
duties of the Trustee hereunder, the transactions contemplated by this Trust
Agreement or any act which the Trustee proposes to take or omit, to rely upon
the advice of such counsel or agents, and to pay its reasonable fees, expenses
and compensation.
(ix) To register any securities held by it in its own name or in
the name of any custodian of such property or of its nominee including the
nominee of any system for the central handling of securities, with or without
the addition of words indicating that such securities are held in a fiduciary
capacity, to deposit or arrange for the deposit of any such securities with such
a system and to hold any securities in bearer form.
(x) To execute, acknowledge and deliver any and all instruments
in writing which the Trustee may deem advisable to carry out any of the
foregoing powers, including
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the power to indicate any division or distribution of any part of the Trust by
deeds or other writings or instruments recorded among the public records of any
jurisdiction where any such property may be located; and no party to any such
instrument in writing signed by the Trustee shall be bound to see to the
application by the Trustee of any money or other property paid or delivered to
them pursuant to the terms of such instrument.
(xi) To make distributions of all or any part of the assets of
the Trust, in money or in kind, or partly in money and partly in kind, including
real estate.
7.3 If Trustee undertakes or defends any litigation arising in
connection with this Trust, Company agrees to indemnify Trustee against
Trustee's costs, expenses and liabilities (including, without limitation,
attorneys' fees and expenses) relating thereto and to be primarily liable for
such payments. If Company does not pay such costs, expenses and liabilities in a
reasonably timely manner, Trustee may obtain payment from the Trust.
7.4 Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
7.5 Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein,
provided, however, that if an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of the policy other than the
Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
7.6 Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, Trustee shall not have any power that could give
this Trust the objective of carrying on a business and dividing the gains
therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Internal Revenue Code.
ARTICLE VIII
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COMPENSATION AND EXPENSES OF TRUSTEE
8.1 The Company shall from time to time pay taxes of any and all kinds
which are lawfully levied or assessed upon or become payable in respect of the
Trust, the income or any property forming a part thereof, or any security
transaction pertaining thereto. To the extent that any taxes lawfully levied or
assessed upon the Trust are not paid by the Company, the Trustee shall pay such
taxes out of the Trust. The Trustee shall at Company expense contest the
validity of such taxes in any manner deemed appropriate by the Company or its
counsel or the Company may itself contest the validity of any such taxes.
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8.2 The Company agrees to indemnify and hold harmless the Trustee and
the Trust from and against all amounts, including without limitation, taxes,
expenses (including reasonable counsel fees), liabilities, claims, damages,
actions, suits or other charges incurred by or assessed against the Trustee or
the Trust as a direct or indirect result of anything done in good faith or
alleged to have been done, by or on behalf of the Trustee in reliance upon the
directions of the Company or any person authorized to act on behalf of the
Company under the Plan, or as a direct or indirect result of anything omitted to
be done in good faith or alleged to have been omitted, in the absence of such
directions, or as a direct or indirect result of the failure of the Company or
any person authorized to act on behalf of the Company directly or through its
agents, to adequately, carefully and diligently discharge its responsibilities
with respect to this Trust or the Plan. Anything hereinabove to the contrary
notwithstanding, the Company shall have no responsibility to the Trustee or the
Trust under the foregoing if the Trustee fails to perform any of the duties
specifically undertaken by it under the provisions of this Trust. The Company
further agrees that the undertakings made in this Section 8.2 shall be binding
on its successors or assigns and shall survive termination, amendment or
restatement of the Trust or the Plan, or the resignation or removal of the
Trustee.
8.3 Any other reasonable expenses incurred by the Trustee in the
performance of its duties under this Trust Agreement, including brokerage
commissions, shall be charged against and paid from the Trust to the extent that
the Company does not pay such expenses.
8.4 The Company will pay the Trustee such reasonable compensation for
its services as may be agreed upon in writing from time to time by the Company
and the Trustee. Such compensation shall be charged against and paid from the
Trust to the extent the Company does not pay such compensation.
ARTICLE IX
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RESIGNATION AND REMOVAL OF TRUSTEE
9.1 Trustee may resign at any time by written notice to Company, which
shall be effective 60 days after receipt of such notice unless Company and
Trustee agree otherwise.
9.2 Trustee may be removed by Company on 60 days notice or upon shorter
notice accepted by Trustee.
9.3 Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the successor
Trustee. The transfer shall be completed within 60 days after receipt of notice
of resignation, removal or transfer, unless Company extends the time limit.
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9.4 If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Article X hereof, by the effective date of resignation or
removal under sections 9.1 or 9.2. If no such appointment has been made,
Trustee may apply to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
ARTICLE X
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APPOINTMENT OF SUCCESSOR
10.1 In the event of a removal or resignation of the Trustee, the Trustee
shall duly file with the Company a statement as provided in Section 6.2 for the
period since the last statement setting forth the transactions and market values
and other information in the normal form provided to the Trustee's trust
customers respecting the Trust not included in any previous statement and if
written objections to such statement are not filed as provided in Section 6.2,
the Trustee shall to the maximum extent permitted by applicable law be forever
released and discharged from all liability and accountability with respect to
the propriety of its acts and transactions shown in such statement except for
matters which the Company could not reasonably have been expected to have
discovered by a proper review of such statement.
10.2 Within 60 days after any such notice of removal or resignation of
the Trustee, the Company shall designate a successor trustee qualified to act
hereunder. A successor trustee must be a financial institution having trust
assets under management of at least $1 billion as of the date of appointment as
successor trustee. Each successor trustee, during such period as it shall act as
such, shall have the powers and duties herein conferred upon the Trustee, and
the word "Trustee" wherever used herein, except where the context otherwise
requires, shall be deemed to include any successor trustee. Upon designation of
a successor trustee and delivery to the resigned or removed Trustee of written
acceptance by the successor trustee of such designation, such resigned or
removed trustee shall promptly assign, transfer, deliver and pay over to such
successor trustee, in conformity with the requirements of applicable law, the
funds and properties in its control or possession then constituting the Trust.
10.3 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
Articles VI and VII hereof. The successor Trustee shall not be responsible for
and Company shall indemnify, and defend the successor Trustee from any claim or
liability resulting from any action or inaction of any prior Trustee or from any
other past event or any condition existing at the time it becomes successor
Trustee.
ARTICLE XI
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AMENDMENT OR TERMINATION
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11.1 This Trust Agreement may be amended by a written instrument executed
by Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan or shall make the Trust revocable after it
has become irrevocable in accordance with Section 1.2 hereof.
11.2 The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan(s). Upon termination of the Trust any assets remaining
in the Trust shall be returned to Company.
11.3 Upon written approval of at least two-thirds of the Participants
then living (and the beneficiaries of deceased Participants) entitled to payment
of benefits pursuant to the terms of the Plan, 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 Company.
ARTICLE XII
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MISCELLANEOUS
12.1 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.
12.2 Benefits payable to Plan participants and their beneficiaries under
this Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment
levy, execution or other legal or equitable process.
12.3 This Trust Agreement shall be governed by nd construed in accordance
with the laws of the Commonwealth of Pennsylvania.
12.4 This Trust Agreement shall be binding upon and inure to the benefit
of the Company and the Trustee and their respective successors and assigns.
12.5 All titles and Article headings herein have been inserted for
convenience of reference only and shall in no way modify, restrict or affect the
meaning or interpretation of any of the terms or provisions of this Trust
Agreement.
12.6 This Trust Agreement is intended as a complete and exclusive
statement of the agreement of the parties hereto, and supersedes all previous
agreements or understandings among them.
12.7 The term "Trustee" shall include any successor trustee. If a Trustee
or custodian hereunder is a bank or trust company, any corporation resulting
from any merger,
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consolidation or conversion to which such bank or trust company may be a party,
or any corporation otherwise succeeding generally to all or substantially all of
the assets or business of such bank or trust company, shall be the successor to
it as Trustee hereunder without the execution of any instrument or any further
action on the part of any party hereto or any Participant hereunder.
12.8 Any reference hereunder to a Participant shall expressly be deemed
to include where relevant a Beneficiary of such Participant or Beneficiary duly
designated under the terms of the Plan. A Participant shall cease to have such
status once any and all amounts due him under the Plan have been satisfied.
12.9 Whenever used herein, and to the extent appropriate, the masculine,
feminine or neuter gender shall include the other two genders, the singular
shall include the plural and the plural shall include the singular.
ARTICLE XIII
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EFFECTIVE DATE
The effective date of this Trust Agreement shall be January 1, 1994.
IN WITNESS WHEREOF, this Trust Agreement has been duly executed by the
parties hereto as of the day and year first above written.
[SEAL]
ATTEST: FIRST MARYLAND BANCORP
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxxx
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[SEAL]
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ATTEST: PNC BANK, N.A.
(as Trustee)
/s/ Xxxxx Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
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