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TRUST AGREEMENT
by and between
SYNERGY FINANCIAL GROUP, INC.
and
THE BANK OF NEW YORK
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TABLE OF CONTENTS
Page
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SECTION 1 - GENERAL........................................................... 1
1.1 Definitions..................................................... 1
1.2 Compliance With Law............................................. 2
SECTION 2 - ESTABLISHMENT OF TRUST............................................ 2
2.1 Appointment and Acceptance of Trustee........................... 2
2.2 Trustee Responsibilities........................................ 3
2.3 Contribution.................................................... 3
2.4 Exclusive Benefit............................................... 3
2.5 Return of Contributions......................................... 3
2.6 Distributions................................................... 4
SECTION 3 - AUTHORITIES....................................................... 5
3.1 Authorized Parties.............................................. 5
3.2 Authorized Instructions......................................... 5
SECTION 4 - INVESTMENT AND ADMINISTRATION OF THE FUND......................... 5
4.1 Investment Funds................................................ 5
4.2 Discretionary Powers and Duties of Trustee...................... 6
4.3 Directed Powers of Trustee...................................... 8
4.4 Employer Stock................................................. 12
4.5 Standard of Care............................................... 12
4.6 Force Majeure.................................................. 12
SECTION 5 - APPOINTMENT AND AUTHORITY OF PENTEGRA............................ 14
5.1 Appointment and Delegation..................................... 14
5.2 Allocation and Investment Directions to Trustee................ 14
5.3 Custody of Participant Loan Documents.......................... 14
5.4 Designation for Authorized Instructions........................ 14
5.5 Resignation or Removal of Pentegra............................. 15
SECTION 6 - REPORTING AND RECORDKEEPING...................................... 15
6.1 Records and Accounts........................................... 15
6.2 Non-Fund Assets................................................ 16
SECTION 7 - COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION................... 16
7.1 Compensation and Expenses...................................... 16
7.2 Tax Obligations................................................ 17
7.3 Indemnification................................................ 00
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XXXXXXX 0 - XXXXXXXXX, TERMINATION, RESIGNATION, REMOVAL..................... 18
8.1 Amendment...................................................... 18
8.2 Removal or Resignation of Trustee.............................. 18
8.3 Property Not Transferred....................................... 18
SECTION 9 - ADDITIONAL PROVISIONS............................................ 19
9.1 No Merger, Consolidation or Transfer of Plan
Assets or Liabilities...................................... 19
9.2 Assignment or Alienation....................................... 19
9.3 Successors and Assigns......................................... 19
9.4 Governing Law.................................................. 19
9.5 Necessary Parties.............................................. 19
9.6 No Third Party Beneficiaries................................... 20
9.7 Execution in Counterparts...................................... 20
9.8 No Additional Rights........................................... 20
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TRUST AGREEMENT
THIS TRUST AGREEMENT, effective as of July 1, 2002 by and
between SYNERGY FINANCIAL GROUP, INC. (the "Company") and THE BANK OF NEW YORK
(the "Trustee").
W I T N E S S E T H:
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WHEREAS, pursuant to an Adoption Agreement, the Company has
adopted a qualified retirement plan for the benefit of its employees and the
employees of certain of the Company's affiliates which have heretofore or may
hereafter adopt such plan (such plan, as amended from time to time, is referred
to herein as the "Plan");
WHEREAS, the Company has established or desires to establish a
trust constituting a part of the Plan, pursuant to which assets will be held to
provide for the funding of, and payment of benefits under, the Plan (the
"Trust");
WHEREAS, the Company desires to appoint the Trustee as trustee
of the Trust and the Trustee is willing to accept such appointment; and
WHEREAS, the Plan provides for one or more fiduciaries named
in the Plan having the power to manage and control the assets of the Plan (the
"Named Fiduciary");
NOW, THEREFORE, the Company and the Trustee, each intending to
be legally bound, agree as follows:
SECTION 1
GENERAL
1.1 Definitions. The terms used herein shall have the
following meanings:
(a) "Agreement" means this instrument, including all
amendments thereto.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
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(c) "Employer" means the Company and any affiliate of the
Company which has heretofore adopted, or may hereafter adopt, the Plan. Each
affiliate of the Company adopting the Plan appoints the Company as its agent for
purposes of this Agreement and agrees that it shall be bound by the decisions,
actions and directions of the Company and the Named Fiduciary under this
Agreement and that the Trustee shall be fully protected in relying upon such
decisions, actions and directions and shall in no event be required to give
notice to or otherwise deal with such affiliate except by dealing with the
Company as agent of such affiliate.
(d) "Employer Stock" shall mean securities of the Employer
which constitute "qualifying employer securities" with respect to the Plan
within the meaning of Section 407 of ERISA.
(e) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended.
(f) "Fund" means the assets held pursuant to this Agreement as
such assets shall exist from time to time.
(g) "Tax Obligations" means the responsibility for payment of
taxes, withholding, certification and reporting requirements, claims for
exemptions or refund, interest, penalties and other related expenses of the
Fund.
1.2 Compliance With Law. The Plan and Trust are intended to
comply with ERISA and to be tax-exempt under Section 501(a) of the Code. The
Company assumes full responsibility to establish and maintain the Plan as a plan
meeting the qualification requirements of Section 401(a) of the Code and shall
immediately notify the Trustee if the Plan ceases to be qualified.
SECTION 2
ESTABLISHMENT OF TRUST
2.1 Appointment and Acceptance of Trustee. The Company hereby
appoints THE BANK OF NEW YORK as Trustee of the Trust with respect to the Fund.
The Company shall provide to Trustee a resolution of its Board of Directors
(which may include a resolution authorizing one or more officers authorized to
act on its behalf) certified by the Secretary or any Assistant Secretary of the
Company ("Certified Resolutions") appointing The Bank of New York as Trustee
hereunder. The Fund shall consist of all monies and other property acceptable to
the Trustee in its sole discretion as may be paid or delivered to the Trustee
from time to time, together with any and all increments thereto,
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proceeds and reinvestments thereof, and income thereon, less payments and
distributions therefrom. The Fund shall be held by the Trustee in trust and
dealt with in accordance with the provisions of this Agreement without
distinction between principal and income. The Trustee hereby accepts its
appointment as trustee, acknowledges that it assumes the duties established by
this Agreement and agrees to be bound by the terms contained herein.
2.2 Trustee Responsibilities. The Trustee shall hold the
assets of, and collect the income and make payments from the Fund, all as
hereinafter provided. Except to the extent that assets of the Fund have been
deposited in a collective investment fund maintained by the Trustee, the Trustee
shall not be responsible, directly or indirectly, for the investment or
reinvestment of the assets of the Fund, which shall be the sole responsibility
of the Named Fiduciary. The Trustee is not a party to, and has no duties or
responsibilities under, the Plan other than those that may be expressly
contained in this Agreement. As to the responsibilities of the Trustee, in any
case in which a provision of this Agreement conflicts with any provision in the
Plan, this Agreement shall control. The Trustee shall have no duties,
responsibilities or liability with respect to the acts or omissions of any prior
trustee.
2.3 Contributions. The Trustee shall have no authority or duty
to determine the adequacy of or enforce the collection of contributions under
the Plan, shall not be responsible for the adequacy of the Trust to meet and
discharge any liabilities under the Plan and shall have no responsibility for
any property until such cash or property is received and accepted by the
Trustee. The Employer and the Named Fiduciary shall have the sole duty and
responsibility for ensuring the adequacy of the Trust to discharge the
liabilities under the Plan, determining the adequacy of the contributions to be
made under the Plan, transmitting the contributions to the Trustee and ensuring
compliance with any statute, regulation or rule applicable to contributions.
2.4 Exclusive Benefit. Except as may be permitted by law or by
the terms of the Plan or this Agreement, at no time prior to the satisfaction of
all liabilities with respect to participants and their beneficiaries under the
Plan shall any part of the Trust be used for or diverted to any purpose other
than for the exclusive benefit of the participants and their beneficiaries. The
assets of the Trust shall be held for the exclusive purposes of providing
benefits to participants of the Plan and their beneficiaries and defraying the
reasonable expenses of administering the Plan and the Trust.
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2.5 Return of Contributions. Notwithstanding any other
provision of this Agreement: (i) if a contribution is conditioned upon a
favorable determination as to the qualified status of the Plan under Code
Section 401 and the Plan receives an adverse determination with respect to its
initial qualification, then any such contribution may be returned to the
Employer within one year after the date of determination; (ii) a contribution
made by the Employer based upon mistake of fact may be returned to the Employer
within one year after the date of such contribution; and (iii) if a contribution
to the Plan is conditioned upon its deductibility under the Code and a deduction
for such a contribution is disallowed, such contribution may be returned to the
Employer within one year after the date of the disallowance of such deduction.
In the case of the return of a contribution due to mistake of
fact or the disallowance of a deduction, the amount which may be returned is the
excess of the amount contributed over the amount that would have been
contributed had there not been a mistake or disallowance. Earnings attributable
to the excess contributions may not be returned to the Employer but losses
attributable thereto must reduce the amount to be so returned. Any return of
contribution made by the Trustee pursuant to this Section shall be made only
upon the direction of the Named Fiduciary, which shall have exclusive
responsibility for determining whether the conditions of such return have been
satisfied and for the amount to be returned.
2.6 Distributions. The Trustee shall make distributions and
payments out of the Fund as directed by the Named Fiduciary and amounts
distributed or paid pursuant to such direction thereafter no longer shall
constitute a part of the Fund. The Named Fiduciary may direct such distributions
and payments to be made to any person, including the Named Fiduciary or an
Employer, or to any paying agent designated by the Named Fiduciary, in such
amounts and in such form (including, without limitation, shares of Employer
Stock) and for such purposes as the Named Fiduciary shall direct. Any such order
shall constitute a certification that the payment is one the Named Fiduciary is
authorized to direct. The Named Fiduciary shall have the exclusive
responsibility, and the Trustee shall not have any responsibility or duty under
this Agreement, for ensuring that any payment made from the Fund at the
direction of the Named Fiduciary does not constitute a diversion of the assets
of the Fund and for determining that any such distribution is in accordance with
the terms of the Plan and applicable law, including, without limitation,
determining the amount, timing or method of payment and the identity of each
person to whom such payments shall be made. The Trustee shall have no
responsibility or duty to determine the tax effect of any payment or to see to
the application of any payment. The Trustee shall not be
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required to make any payment from the Fund in excess of the net realizable value
of the assets of the Fund or to make any payment in cash unless there is
sufficient cash in the Fund or the Named Fiduciary has provided written
instructions as to the assets to be converted to cash for the purpose of making
the distribution. If a dispute arises as to who is entitled to or should receive
any benefit or payment, the Trustee may withhold or cause to be withheld such
payment until the dispute is resolved.
SECTION 3
AUTHORITIES
3.1 Authorized Parties. The Company shall identify the Named
Fiduciary to the Trustee and shall furnish the Trustee with a written list of
the names, signatures and extent of authority of all persons authorized to
direct the Trustee and otherwise act on behalf of the Company under the terms of
this Agreement. The Named Fiduciary will provide the Trustee with a written list
of the names, signatures and extent of authority of all persons authorized to
act on behalf of the Named Fiduciary. The Trustee shall be entitled to rely on
and shall be fully protected in acting upon direction from an authorized party
until notified in writing by the Company or the Named Fiduciary, as appropriate,
of a change of the identity of an authorized party.
3.2 Authorized Instructions. All directions and instructions
to the Trustee from a party who has been authorized to act on behalf of the
Company or the Named Fiduciary pursuant to Section 3.1 or from Pentegra (as
provided for in Section 5.4) shall be in writing, transmitted by mail or by
facsimile or shall be an electronic transmission, provided the Trustee may, in
its discretion, accept oral directions and instructions and may require
confirmation in writing of any such oral directions and instructions. The
Trustee shall be entitled to rely on and shall be fully protected in acting in
accordance with all such directions and instructions which the Trustee
reasonably believes to have been given by a party who has been authorized to act
on behalf of the Company or the Named Fiduciary pursuant to Section 3.1 or by
Pentegra (pursuant to Section 5.4) and in failing to act in the absence thereof.
SECTION 4
INVESTMENT AND ADMINISTRATION OF THE FUND
4.1 Investment Funds. The Named Fiduciary, from time to time
and in accordance with the provisions of the Plan, shall direct the Trustee to
establish one or more separate investment
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accounts under the Trust (each such separate account hereinafter referred to as
an "Investment Fund"). The Trustee shall transfer to each such Investment Fund
such portion of the assets of the Fund as the Named Fiduciary directs. The
assets which have been allocated to an Investment Fund shall be invested and
reinvested in accordance with the instructions of the Named Fiduciary, which
shall have exclusive responsibility therefor. The Trustee shall be under no duty
to question, and shall not incur any liability on account of following, the
instructions of the Named Fiduciary, with respect to any Investment Fund or the
investment or reinvestment of any assets of the Fund or any Investment Fund, nor
to make suggestions to the Named Fiduciary in connection therewith or to
determine the compliance of such instructions with the Plan or applicable law,
including, without limitation, the requirements of Sections 406 and 407 of
ERISA. The Trustee shall not be liable for any losses, costs or expenses
(including, without limitation, any opportunity costs) resulting from any
investment directions given or omitted by the named Fiduciary and the Trustee
shall not be liable for any losses, cost or expenses associated with the
investment decisions of the Named Fiduciary, including, without limitation, any
losses, costs or expenses associated with the selection of investments by the
Named Fiduciary, actual investments directed by the Named Fiduciary and the
market risks associated with such selections and directions. If the Trustee is
directed to deliver property against payment, the Trustee shall have no
liability for non-receipt of such payment.
Unless the Trustee is otherwise directed by the Named
Fiduciary, all interest, dividends and other income received with respect to,
and all proceeds received from the sale or other disposition of, assets of an
Investment Fund shall be credited to and reinvested in such Investment Fund, and
all expenses of the Fund which are properly allocable to a particular Investment
Fund shall be so allocated and charged. Subject to the provisions of the Plan,
the Named Fiduciary may direct the Trustee to eliminate an Investment Fund or
Funds, and the Trustee thereupon shall dispose of the assets of such Investment
Fund or Funds and reinvest the proceeds thereof in accordance with the
instructions of the Named Fiduciary.
4.2 Discretionary Powers and Duties of Trustee. Subject to the
provisions and limitations contained elsewhere herein, in administering the
Trust, the Trustee shall be specifically authorized in its sole administrative
discretion to:
(a) Appoint subtrustees or depositories, domestic or foreign
(including affiliates of the Trustee), as to part or all of the Fund, except
that the indicia of ownership of any asset of the Fund shall not be held outside
the jurisdiction of the
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xxxxxxxx xxxxxx xx xxx Xxxxxx Xxxxxx unless in compliance with Section 404(b) of
ERISA and regulations thereunder;
(b) Appoint one or more individuals or corporations as a
custodian of any property of the Fund and, as part of its reimbursable expenses
under this Agreement, to pay the reasonable compensation and expenses of any
such custodian;
(c) Hold property in nominee name, in bearer form, or in book
entry form, in a clearinghouse corporation or in a depository (including an
affiliate of the Trustee), so long as the Trustee's records clearly indicate
that the assets held are a part of the Fund;
(d) Collect income payable to and distributions due to the
Fund and sign on behalf of the Trust any declarations, affidavits, certificates
of ownership and other documents required to collect income and principal
payments, including but not limited to, tax reclamations, rebates and other
withheld amounts;
(e) Collect proceeds from securities, certificates of deposit
or other investments which may mature or be called and surrender such securities
at maturity or when called; provided, however, that the Trustee shall not be
liable for failure to surrender any security for redemption prior to maturity or
take other action if notice of such redemption or other action was not provided
to the Trustee by the issuer, the Named Fiduciary or one of the nationally
recognized bond or corporate action services to which the Master Trustee
subscribes;
(f) Exchange securities in temporary form for securities in
definitive form, and to effect an exchange of shares where the par value of
stock is changed;
(g) Submit or cause to be submitted to the Named Fiduciary, on
a best efforts basis, all information received by the Trustee regarding
ownership rights pertaining to property held in the Fund;
(h) Attend to involuntary corporate actions;
(i) Determine, or cause to be determined, the fair market
value of the Fund daily, or for such other period as may be mutually agreed
upon, in accordance with methods consistently followed and uniformly applied;
(j) Render periodic statements for property held hereunder;
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(k) Commence or defend suits or legal proceedings and
represent the Fund in all suits or legal proceedings in any court or before any
other body or tribunal as the Trustee shall deem necessary to protect the Fund
(provided, however, that the Trustee shall have no obligation to take any legal
action for the benefit of the Fund unless it shall first be indemnified for all
expenses in connection therewith, including without limitation counsel fees);
(l) Employ suitable agents and legal counsel, who may be
counsel for an Employer, and, as a part of its reimbursable expenses under this
Agreement, to pay their reasonable compensation and expenses. The Trustee shall
be entitled to rely on and may act upon advice of counsel on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice;
(m) Subject to the requirements of applicable law, take all
action necessary to settle authorized transactions;
(n) Form corporations and create trusts under the laws of any
state for the purpose of acquiring and holding title to any securities or other
property, all on such terms and conditions as the Trustee deems advisable;
(o) Make, execute and deliver any and all documents,
agreements or other instruments in writing as are necessary or desirable for the
accomplishment of any of the powers and duties in this Agreement; and
(p) Generally take all action, whether or not expressly
authorized, which the Trustee may deem necessary or desirable for the
fulfillment of its duties hereunder.
4.3 Directed Powers of Trustee. In addition to the powers
enumerated in Section 4.2, the Trustee shall have the following powers and
authority in the administration of the Fund to be exercised solely as directed
by the Named Fiduciary:
(a) Invest and reinvest in any securities or other property
including Employer Stock, provided that in no case without the consent of the
Trustee will the assets of the Fund be invested in assets other than Employer
Stock or units of collective investment funds;
(b) Settle purchases and sales and engage in other
transactions, including free receipts and deliveries, exchanges and other
voluntary corporate actions, with respect to securities or other property
received by the Trustee;
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(c) Redeem, transfer or exchange securities of the Fund; sell,
exchange, convey, transfer or otherwise dispose of any other property of the
Fund; and make, execute and deliver to the purchasers thereof good and
sufficient legal documents of conveyance therefor, and all assignments,
transfers and other legal instruments, either necessary or convenient for
passing the title and ownership of such securities and other property, and no
person dealing with the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency or propriety of any
such sale or disposition;
(d) Deliver notices, prospectuses and proxy statements to the
Named Fiduciary, and, subject to Section 4.4, vote in person or by proxy with
respect to any securities held by the Trust Fund in accordance with the written
directions of the Named Fiduciary; and in accordance with such power, exercise
subscription, conversion and other rights and options and make payments
incidental thereto and take action or refrain from taking any action with
respect to any reorganization, consolidation, merger, dissolution or other
recapitalization or refinancing and pay any assessments or charges in connection
therewith and delegate discretionary powers with respect thereto; but the
Company understands that, where options, tenders or other rights have fixed
expiration dates, in order for the Trustee to act, it must receive instructions
at its offices, addressed as the Trustee may from time to time request, by no
later than noon (N.Y. City time) at least one business day prior to the last
scheduled date to act with respect thereto (or such earlier date or time as the
Trustee may direct);
(e) Hold any part of the Fund in cash or cash balances and the
Trustee shall not be responsible for the payment of interest on such balances;
(f) Make loans from the Fund to participants in the Plan,
which shall be secured by the participants account balance; however, the Named
Fiduciary shall have full and exclusive responsibility for loans made to
participants, including, without limitation, full and exclusive responsibility
for the following: development of procedures and documentation for such loans;
acceptance of loan applications; approval of loan applications; disclosure of
interest rate information required by Regulation Z of the Federal Reserve Board
promulgated pursuant to the Truth in Lending Act, 15 U.S.C. ss. 1601 et seq.;
ensuring that such loans shall bear a reasonable rate of interest (within the
meaning of Regulation ss. 2550.408(b)(1) promulgated by the Department of
Labor); acting as agent of the Trustee for the physical custody and safekeeping
of the promissory notes and other loan documents; performing necessary and
appropriate recordkeeping and accounting functions with respect to loan
transactions; enforcement of
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promissory note terms, including, but not limited to, directing the Trustee to
take specified actions to enforce its rights under the documents relating to
plan loans, including, without limitation, the occurrence of events of default
and maintenance of accounts and records regarding interest and principal
payments on notes. The Trustee shall not in any way be responsible for holding
or reviewing such documents, records and procedures and shall be entitled to
rely upon such information as is provided by the Named Fiduciary or its own
sub-agent or recordkeeper without any requirement or responsibility to inquire
as to the completeness or accuracy thereof, but may from time to time examine
such documents, records and procedures as it deems appropriate. Unless otherwise
instructed in writing by the Named Fiduciary, the Trustee shall have no duty or
responsibility to file a UCC-1 form or take other action in order to perfect its
security interest in the accounts of a Participant to whom a loan is made. The
Company shall indemnify and hold the Trustee and its directors, officers and
employees harmless from all claims, liabilities, losses, damages, costs and
expenses, including reasonable attorneys' fees, arising out of any action or
inaction of the Named Fiduciary with respect to its agency responsibilities
described herein with respect to participant loans and this indemnification
shall survive the termination of this Agreement;
(g) Execute proxies for any securities held in the Fund;
(h) Deposit cash in interest bearing accounts in the banking
department of the Trustee, the Company (provided that the Company meets the
requirements of ss. 408(b)(4) of ERISA) or in affiliated banking organization of
the Trustee or the Company;
(i) Compromise, compound, settle or arbitrate any claim, debt
or obligation due to or from the Trustee and to reduce the rate of interest on,
extend or otherwise modify, or to foreclose upon default or otherwise enforce
any such obligation; and to abandon any property determined by the Named
Fiduciary to be worthless;
(j) Invest in any collective investment fund, including any
collective investment fund maintained by the Trustee or an affiliate. The
Trustee shall have no responsibility for the custody or safekeeping of assets
transferred to any collective investment trust not maintained by the Trustee. To
the extent that any investment is made in any such collective investment fund,
the terms of the collective trust indenture shall solely govern the investment
duties, responsibilities and powers of the trustee of such collective investment
fund and, to the extent required by law or by such indenture, such terms,
responsibilities and powers shall be
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incorporated herein by reference and shall be a part of this Agreement. For
purposes of valuation, the value of the interest maintained by the Fund in any
such collective investment fund shall be the fair market value of the collective
investment fund units held, determined in accordance with generally recognized
valuation procedures. The Company expressly understands and agrees that any such
collective investment fund may provide for the lending of its securities by the
collective investment fund trustee and that such collective investment fund
trustee will receive compensation from the borrowers for the lending of
securities that is separate from any compensation of the Trustee hereunder, or
any compensation of the collective investment fund trustee for the management of
such fund; and
(k) For the purposes of the Fund, to borrow money from any
person or persons, including The Bank of New York, to issue the Fund's
promissory note or notes therefor, and to secure the repayment thereof by
pledging, mortgaging or otherwise encumbering any property in its possession.
4.4 Employer Stock.
(a) The Named Fiduciary may direct that all or a portion of
the Fund or any Investment Fund be invested in Employer Stock and the Trustee
shall act in accordance with any such directions. Except as otherwise required
under ERISA, the Trustee shall have no discretionary authority or responsibility
to exercise voting rights, or rights in the event of a tender offer, with
respect to such Employer Stock but instead shall be subject to the directions of
the Named Fiduciary in the exercise of such rights.
To the extent that the Plan provides for the voting or
tendering of Employer Securities by Plan participants, the Named Fiduciary shall
not improperly interfere in any manner regarding the decisions by or directions
of any participant with respect to the vote of or response to a tender offer for
Employer Securities allocated to the participant's account, and the Named
Fiduciary shall arrange for such voting or participant's decision regarding the
participant's action with respect to an offer to take place on a confidential
basis. The Named Fiduciary will adequately communicate or cause to be
communicated to all participants the provisions of the Plan and this Agreement
relating to the right of participants with respect to Employer Stock under the
Plan. The Company will provide the Named Fiduciary with such information and
assistance as the Named Fiduciary may reasonably request, in connection with any
communications or distributions to participants.
The Company will distribute or cause to be distributed to
participants entitled to direct the Named Fiduciary with
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respect to Employer Stock, all materials and communications which it provides to
other stockholders of the Company in connection with such vote. The Trustee may
rely on the Company for such distribution and will not be liable for the
Company's failure to provide such materials and communications to any such
participant.
(b) In the event that the Trustee is directed to dispose of
any Employer Stock under circumstances which, in the opinion of the Trustee,
require registration of such securities under the Securities Act of 1933 and/or
qualification of such securities under the Blue Sky laws of any state or states,
then the Company, at its own expense, will promptly take or cause to be taken
any and all action necessary or appropriate to effect such registration and/or
qualification. In such event, the Trustee shall not be required to dispose of
such securities until such registration and/or qualification are complete and
effective, and the Trustee shall not be liable for any loss or depreciation of
the Fund resulting from any delay attributable thereto. The Company will
indemnify and hold the Trustee and its officers, directors and employees
harmless with respect to any claim, liability, loss, damage or expense (except
any such claims, liabilities, losses, damages or expenses that are attributable
to the Trustee's own gross negligence, bad faith or willful misconduct with
respect to any duties specifically undertaken herein) incurred as a result of
such registration or qualification or as a result of any information in
connection therewith furnished by the Company or as a result of any failure by
the Company to furnish any such information. This indemnification shall survive
termination of this Agreement. Unless otherwise directed by the Named Fiduciary,
any proceeds received by the Trustee as a result of the sale, exchange or
transfer of Employer Stock pursuant to a tender offer shall be reinvested in
Employer Stock by the Trustee if such security is available for purchase.
4.5 Standard of Care. The Trustee shall discharge its duties
under this Agreement with the care and skill required under ERISA with respect
to its duties. The Trustee shall not be responsible for the title, validity or
genuineness of any property or evidence of title thereto received by it or
delivered by it pursuant to this Agreement and shall be held harmless in acting
upon any notice, request, direction, instruction, consent, certification or
other instrument believed by it to be genuine and delivered by the proper party
or parties. The duties of the Trustee shall only be those specifically
undertaken pursuant to this Agreement or by separate written agreement.
4.6 Force Majeure. The Trustee shall not be responsible or
liable for any losses to the Fund resulting from nationalization, expropriation,
devaluation, seizure, or similar
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action by any governmental authority, de facto or de jure; or enactment,
promulgation, imposition or enforcement by any such governmental authority of
currency restrictions, exchange controls, levies or other charges affecting the
Fund's property; or acts of war, terrorism, insurrection or revolution; or acts
of God; or any other similar event beyond the control of the Trustee or its
agents. This Section shall survive the termination of this Agreement.
SECTION 5
APPOINTMENT AND AUTHORITY OF PENTEGRA
5.1 Appointment and Delegation. The Company hereby certifies
to the Trustee that Pentegra Services, Inc. ("Pentegra") is the third party
administrator appointed by the Named Fiduciary or the Company to receive,
cumulate and communicate investment and distribution directions of the
participants and beneficiaries of the Plan with respect to the Fund or the
Investment Funds, and the Named Fiduciary has delegated such responsibility and
authority exclusively to Pentegra. For purposes of this Agreement, Pentegra
shall be a delegee of the Named Fiduciary in accordance with Section
405(c)(1)(B) of ERISA. Except as provided in Section 5.5, the Trustee shall act
solely on the directions and instructions communicated to the Trustee by
Pentegra and the Trustee shall not be liable for any failure to act on any
direction or instruction of any other party.
5.2 Allocation and Investment Directions to Trustee. Pentegra
shall direct the Trustee with respect to the allocation of assets to the
Investment Funds, transfers among the Investment Funds and investment and
reinvestment of the assets of the Fund and each Investment Fund. The Trustee
shall have no duty to invest, and shall not be liable for any interest on, any
such assets it holds uninvested pending receipt of directions from Pentegra to
invest or reinvest assets of the Fund.
5.3 Custody of Participant Loan Documents. Pentegra is further
authorized and is hereby appointed by the Named Fiduciary and the Company to act
as custodian for the Trustee of all original promissory notes and security
agreements which shall be held subject to the order of the Trustee. In the event
that such custodianship is terminated by Pentegra, the Named Fiduciary or the
Trustee, the Named Fiduciary shall retain the originals of all promissory notes
and security agreements as custodian for the Trustee.
5.4 Designation for Authorized Instructions. Pentegra shall
furnish the Trustee with a written list of the names,
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signatures and extent of authority of all persons authorized to act on behalf of
Pentegra. The Trustee shall be entitled to rely on and shall be fully protected
in acting upon direction reasonably believed by it to be from an authorized
party (or omitting to act in the absence of direction) until notified in writing
by Pentegra, of a change in the identity of an authorized party. Directions of
an authorized party shall be governed by Section 3.2 of this Agreement.
5.5 Resignation or Removal of Pentegra. In the event Pentegra
resigns or is removed as third party administrator under the Plan, or Pentegra's
authority is circumscribed in any manner, the Company shall promptly notify the
Trustee of such resignation, removal or circumscription of authority and shall
furnish the Trustee with Certified Resolutions identifying the Named Fiduciary
and any other persons authorized to assume the duties and responsibilities of
Pentegra with respect to the Plan. The Trustee shall not have or be deemed to
have any responsibility to assume the functions and duties of Pentegra, shall
have no duty or responsibility to invest or reinvest the assets of the Fund and
shall not be liable for any losses to the Fund (including any opportunity costs)
as a result of its failure to act prior to receiving the foregoing Certified
Resolution.
SECTION 6
REPORTING AND RECORDKEEPING
6.1 Records and Accounts. The Trustee shall keep full and
accurate records of all receipts, investments, disbursements, and other
transactions hereunder, including such specific records as may be agreed upon in
writing between the Company and the Trustee. Within ninety (90) days after the
end of each fiscal year of the Trust or within ninety (90) days after its
removal or resignation or the termination of this Agreement, the Trustee shall
file with the Company a written account of the administration of the Fund
showing all transactions effected by the Trustee and all property held by the
Fund at its fair market value for the accounting period. If, within ninety (90)
days after the Trustee mails such account to the Company, the Company has not
given the Trustee written notice of any exception or objection thereto, the
statement shall be deemed to have been approved, and in such case, the Trustee
shall not be liable for any matters in such statements. Upon prior written
notice, the Company or its agent shall have the right at its own expense to
inspect the Trustee's books and records directly relating to the Fund during
normal business hours. If for any reason the Trustee fails to file an account
required of the Trustee within the applicable times specified hereunder, such
account shall be filed by the Trustee after the expiration of such time as soon
as is
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reasonably practicable. To the extent that the Trustee shall be required to
value the assets of the Fund, the Trustee may rely for all purposes of this
Agreement upon any certified appraisal or other form of valuation submitted by
the Named Fiduciary, Pentegra, any investment manager or other third party
appointed by the Named Fiduciary. Nothing in this Section shall impair Trustee's
right to judicial settlement of any account rendered by it. In any such
proceeding the only necessary parties shall be the Trustee, the Company and any
other party whose participation is required by law, and any judgment, decree or
final order entered shall be conclusive on all persons having an interest in the
trust.
The fiscal year of the Trust shall be the plan year as
established under the terms of the Plan.
6.2 Non-Fund Assets. The duties of the Trustee shall be
limited to the assets held in the Fund, and the Trustee shall have no duties
with respect to assets held by any other person including, without limitation,
any other trustee for the Plan unless otherwise agreed in writing. The Company
hereby agrees that the Trustee shall not serve as, and shall not be deemed to
be, a co-trustee under any circumstances. The Named Fiduciary may request the
Trustee to perform a recordkeeping service with respect to property held by
others and not otherwise subject to the terms of this Agreement. To the extent
the Trustee shall agree to perform this service, its sole responsibility shall
be to accurately reflect information on its books which it has received from the
Named Fiduciary.
SECTION 7
COMPENSATION, EXPENSES, TAXES, INDEMNIFICATION
7.1 Compensation and Expenses. The Trustee shall be entitled
to compensation for services under this Agreement as mutually agreed by the
Company and the Trustee. The Trustee shall also be entitled to reimbursement for
reasonable expenses incurred by it in the discharge of its duties under this
Agreement. The Trustee is authorized to charge and collect from the Fund any and
all such fees and expenses to the extent such fees and expenses are not paid
directly by the Company, another Employer or by Pentegra (acting on behalf of
the Company or such other Employer).
All amounts (including taxes) paid from the Fund which are
allocable to an Investment Fund shall be charged to such Investment Fund in
accordance with Section 4.1 of this Agreement. All such expenses which are not
so allocable shall be charged against each of the Investment Funds in the same
proportion as
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the value of the total assets held in such Investment Fund bears to the value of
the total assets in the Fund.
To the extent the Trustee advances funds to the Fund for
disbursements or to effect the settlement of purchase transactions, the Trustee
shall be entitled to collect from the Fund an amount equal to what would have
been earned on the sums advanced (an amount approximating the "federal funds"
interest rate).
7.2 Tax Obligations. To the extent that the Company or Named
Fiduciary has provided necessary information to the Trustee, the Trustee shall
use reasonable efforts to assist the Company or the Named Fiduciary with respect
to any Tax Obligations. The Company or Named Fiduciary shall notify the Trustee
of any Tax Obligations. Notwithstanding the foregoing, the Trustee shall have no
responsibility or liability for any Tax Obligations now or hereafter imposed on
any Employer or the Fund by any taxing authorities, domestic or foreign, except
as provided by applicable law.
To the extent the Trustee is responsible under any applicable
law for any Tax Obligation, the Company or the Named Fiduciary shall inform the
Trustee of all Tax Obligations, shall direct the Trustee with respect to the
performance of such Tax Obligations, and shall provide the Trustee with all
information required by the Trustee to meet such Tax Obligations. All such Tax
Obligations shall be paid from the Fund unless paid by the Company or another
Employer.
7.3 Indemnification. The Company shall indemnify and hold
harmless the Trustee and its directors, officers and employees from all claims,
liabilities, losses, damages and expenses, including reasonable attorneys' fees
and expenses, incurred by the Trustee in connection with this Agreement, except
those resulting from the Trustee's gross negligence, bad faith or willful
misconduct. This indemnification (as well as any other indemnification in this
Agreement) shall survive the termination of this Agreement. If the Trustee is
acting as a successor trustee or succeeds to responsibilities hereunder for
trusteeship of plan assets with respect to the Fund (or any portion thereof),
the Company hereby agrees to hold the Trustee harmless from and against any tax,
claim, liability, loss, damage or expense incurred by or assessed against it as
such successor as a direct or indirect result of any act or omission of a
predecessor trustee or any other person charged under any agreement affecting
Fund assets with investment responsibility with respect to such assets, except
for such taxes, claims, liabilities, losses, damages or expenses attributable to
the Trustee's own gross negligence, bad faith or willful misconduct.
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SECTION 8
AMENDMENT, TERMINATION, RESIGNATION, REMOVAL
8.1 Amendment. This Agreement may be amended by written
agreement signed by the Company and the Trustee. This Agreement may be
terminated at any time by the Company by written instrument delivered to the
Trustee. Thereafter, the Trustee shall distribute all assets of the Fund, less
any fees and expenses payable from the Fund with respect to the Plan, pursuant
to instructions of the Named Fiduciary. The Trustee may condition its delivery,
transfer or distribution of any assets upon the Trustee's receiving assurances
reasonably satisfactory to it that the approval of appropriate governmental or
other authorities has been secured and that all notices and other procedures
required by applicable law have been complied with. The Trustee shall be
entitled to assume that such distributions are in full compliance with and not
in violation of the terms of the Plan or any applicable law.
8.2 Removal or Resignation of Trustee. The Trustee may be
removed with respect to all or part of the Fund upon receipt of sixty (60) days'
written notice (unless a shorter or longer period is agreed upon) from the
Company. The Trustee may resign as Trustee hereunder upon sixty (60) days'
written notice (unless a shorter or longer period is agreed upon) delivered to
the Company. In the event of such removal or resignation, a successor trustee
will be appointed and the retiring Trustee shall transfer the Fund, less such
amounts as may be reasonable and necessary to cover its compensation and
expenses. In the event the Company fails to appoint a successor trustee within
sixty (60) days of receipt of written notice of resignation, the Trustee
reserves the right to seek the appointment of a successor trustee from a court
of competent jurisdiction. The Trustee shall have no duties, responsibilities or
liability with respect to the acts or omissions of any successor trustee.
8.3 Property Not Transferred. The Trustee reserves the right
to retain such property as is not suitable for distribution or transfer at the
time of the termination of a Plan or this Agreement and shall hold such property
for the benefit of those persons or other entities entitled to such property
until such time as the Trustee is able to make distribution. Upon the
appointment and acceptance of a successor trustee, the Trustee's sole duties
shall be those of a custodian with respect to any property not transferred to
the successor trustee.
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SECTION 9
ADDITIONAL PROVISIONS
9.1 No Merger, Consolidation or Transfer of Plan Assets or
Liabilities. Notwithstanding anything to the contrary contained herein, no
merger, consolidation or transfer of the assets or liabilities of the Plan with
or to any other plan shall be permitted, except in compliance with the
provisions of ERISA and the Code which are applicable to such mergers,
consolidations or transfers, including, without limitation, Sections 208 and
4043(b)(8) of ERISA and Sections 401(a)(12), 414(l) and 6058(b) of the Code, and
the regulations thereunder.
9.2 Assignment or Alienation. Except as may be required by law
or permitted by the Plan, the Fund shall not be subject to any form of
attachment, garnishment, sequestration or other actions of collection afforded
creditors of the Employer, participants or beneficiaries under the Plan. The
Trustee shall not recognize any permitted assignment or alienation of benefits
unless directed to do so by the Named Fiduciary or required to do so by
applicable law.
9.3 Successors and Assigns. Neither the Company nor the
Trustee may assign this Agreement without the prior written consent of the
other, except that the Trustee may assign its rights and delegate its duties
hereunder to any corporation or entity which directly or indirectly is
controlled by, or is under common control with, the Trustee. This Agreement
shall be binding upon, and inure to the benefit of, the Company and the Trustee
and their respective successors and permitted assigns. Any entity which shall by
merger, consolidation, purchase, or otherwise, succeed to substantially all the
trust business of the Trustee shall, upon such succession and without any
appointment or other action by the Company, be and become successor trustee
hereunder, upon notification to the Company.
9.4 Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York (without
giving effect to conflict of law principles thereof) to the extent not preempted
by Federal law.
9.5 Necessary Parties. The Trustee reserves the right to seek
a judicial or administrative determination as to its proper course of action
under this Agreement. Nothing contained herein will be construed or interpreted
to deny the Trustee or the Company the right to have the Trustee's account
judicially determined. To the extent permitted by law, only the Trustee and the
Company shall be necessary parties in any application to the courts for an
interpretation of this Agreement or for an accounting by the Trustee, and no
participant or beneficiary
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under the Plan or other person having an interest in the Fund shall be entitled
to any notice or service of process. Any final judgment entered in such an
action or proceeding shall, to the extent permitted by law, be conclusive upon
all persons.
9.6 No Third Party Beneficiaries. The provisions of this
Agreement are intended to benefit only the parties hereto, their respective
successors and assigns, and participants and their beneficiaries under the Plan.
There are no other third party beneficiaries.
9.7 Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an original, and
said counterparts shall constitute but one and the same instrument and may be
sufficiently evidenced by one counterpart.
9.8 No Additional Rights. Neither the establishment of the
Fund nor this Agreement shall be considered as giving any Plan participant or
any other person any legal or equitable rights against the Employer, the Named
Fiduciary, the Trustee or the assets, whether corpus or income, of the Fund
unless such right is specifically provided for in this Agreement or the Plan,
nor shall it be considered as giving any Plan participant or other employee of
the Employer the right to continue in the service of the Employer in any
capacity.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the effective date set forth above.
Authorized Signer of:
SYNERGY FINANCIAL GROUP, INC. THE BANK OF NEW YORK
By: By:
--------------------------------- ----------------------------------
Name: Name:
Title: Title:
Date: Date:
--------------------------------- ----------------------------------
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