Exhibit 10.26
EMPLOYEE GRANTOR TRUST ENROLLMENT AGREEMENT
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This agreement, made the ____ day of ________________, 1995, between
[Executive] (the "Employee"), the person, if any, to whom the Employee is
legally married (the "Employee's Spouse"), and Xxxxxx Xxxxxx Companies Inc.,
("Xxxxxx Xxxxxx") and those subsidiaries of Xxxxxx Xxxxxx, if any, that have
also executed this agreement (collectively, the "Company"),
INTRODUCTION
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The Company has established and maintains the Xxxxxx Xxxxxx Benefit
Equalization Plan, Xxxxxx Xxxxxx Survivor Income Benefit Equalization Plan,
Xxxxxx Xxxxxx Supplemental Management Employees' Retirement Plan, [and] Kraft
Foods Supplemental Benefits Plan, [and (name of any other relevant supplemental
retirement arrangement)] (the "Supplemental Plans"), which are designed to
provide benefits supplemental to those provided under the tax-qualified
retirement plans maintained by the Company (the "Qualified Plans"). The
Employee is entitled to certain benefits under one or more of the Supplemental
Plans.
The Employee and the Company desire to enter into this Agreement
pursuant to which the Employee directs the Company to deposit certain cash
compensation payments on behalf of the Employee directly into a grantor trust to
be established and maintained by the Employee, which amounts will be in lieu of
benefits payable under the Supplemental Plans;
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In consideration of their mutual undertakings, the Company, the
Employee, and the Employee's Spouse agree as follows:
I. Establishment and Maintenance of Grantor Trust
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1.1 The Employee agrees to establish and maintain an irrevocable
grantor trust (the "Trust") in the form attached hereto as Exhibit A for the
purpose of receiving and holding the cash deposits made pursuant to this
Agreement and any interest or other earnings on the outstanding balances in the
Trust.
1.2 The Employee and the Employee's Spouse agree that they will not
contribute any additional funds to the Trust and will withdraw funds only in
accordance with the terms of the Supplemental Plans, except to the extent that
Trust withdrawals are necessary to pay taxes on Trust earnings or cash deposits.
II. Payments to Trust
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2.1 The Company agrees to make available to the Employee $[insert sum
of trust contribution and tax payments] (the "Funding Payment"), as of [month,
day, year] and the Employee directs the Company to (a) deduct federal, state and
local income and employment taxes from the Funding Payment and remit such taxes
to the appropriate authorities; and (b) pay the remainder of the Funding Payment
into the Trust in cash.
2.2 The Company may, from time to time, make available to the Employee
additional funding payments. Unless the Employee terminates this Agreement
pursuant to Section 7.2 prior to the time such additional funding payments are
to be paid into the Trust, the Employee directs the Company to (a) deduct
federal, state and local income and employment taxes from such additional
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funding payments and remit such taxes to the appropriate authorities; and (b)
pay the remainder of such additional funding payments into the Trust.
III. Distributions from Trust, Benefit Payments
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3.1 The Employee and the Employee's Spouse agree that any amounts paid
from the Trust including any Trust earnings (other than any amounts distributed
to pay taxes on Trust earnings) shall offset the benefits otherwise payable to
them under the Supplemental Plans. For purposes of calculating this offset, the
amount otherwise payable under the Supplemental Plans at the relevant time to
the Employee or his Beneficiary(ies) will be converted to an after-tax amount
(the "After-Tax Benefit") using the tax assumptions set forth in Exhibit B. The
amount of any Trust distribution shall offset the amount of the After-Tax
Benefit and shall discharge the Company's liability to the Employee, the
Employee's Spouse and his Beneficiary(ies) to the extent of the corresponding
pre-tax benefit otherwise payable under the Supplemental Plans.
3.2 If the amount of the Trust distribution is less than the After-Tax
Benefit, the difference between the amount of the Trust distribution and the
After-Tax Benefit shall be converted to a pre-tax amount (the "Additional
Pre-Tax Benefit") based on the tax assumptions set forth in Exhibit B, and the
Company shall pay an amount equal to the Additional Pre-Tax Benefit to the
Employee or his Beneficiary(ies), from the Company's general assets in
satisfaction of the Company's remaining obligations under the Supplemental
Plans.
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3.3 The Employee and the Employee's Spouse understand and agree that to
the extent funds in the Trust are distributed to either of them in amounts
greater than, or at times earlier than, those contemplated by the benefit
payment provisions of the Supplemental Plans and by Sections 3.1 and 3.2 hereof,
(a) the offsets against any amounts otherwise payable under the Supplemental
Plans will be calculated in the manner set forth in Section 6.1 as if the
amounts so distributed had remained in the Trust, accumulated earnings, and been
distributed at the proper time; and (b) such offsets will discharge the
Company's liability in the same manner as set forth in such Section 6.1.
IV. Tax Payments With Respect to Trust Earnings
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The Company may make payments on behalf of the Employee (or his
Beneficiary(ies)) to tax authorities to pay the federal, state and local income
taxes with respect to any earnings of the Trust and any income and employment
taxes as a result of the Company's payment of the Employee's taxes under this
Article IV. To the extent that the Company does not make payments sufficient
(using the assumptions set forth in Exhibit B) to pay such taxes, Trust income
will be distributed to provide any additional amounts required for such purpose.
V. Appointment of Xxxxxx Xxxxxx as Agent
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5.1 The Employee appoints Xxxxxx Xxxxxx and such persons as may be
designated to act on behalf of Xxxxxx Xxxxxx as his duly authorized agent for
the following purposes: (a) providing, in accordance with the duties of the
"Administrator" as set forth in the form of Trust Agreement attached as Exhibit
A, investment
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guidelines and other information and direction to the trustee of the Trust;
(b) removing the trustee and appointing a successor trustee of the Trust; (c)
examining the books and records of the Trust; and (d) amending and terminating
the Trust.
5.2 The Employee's appointment of Xxxxxx Xxxxxx as his agent is based
on the Employee's special trust and confidence in Xxxxxx Xxxxxx and its
management. In the event of a Change of Control (as defined in Section 8.5) of
Xxxxxx Xxxxxx, the Employee (or, if applicable, his Beneficiary(ies)) may remove
Xxxxxx Xxxxxx (or its successor) as the duly authorized agent for purposes of
carrying out the actions set forth in Section 5.1 by delivering to both Xxxxxx
Xxxxxx (or its successor) and the trustee of the Trust, within any period of two
days, written notice of such removal. The trustee shall not be required to
verify that there has been a Change of Control of Xxxxxx Xxxxxx and shall be
entitled to rely upon the Employee's notice of removal unless Xxxxxx Xxxxxx
provides to the trustee (within 10 days following the trustee's receipt of the
notice of removal from the Employee) written notice certifying that no Change of
Control has occurred. From and after the date on which Xxxxxx Xxxxxx (or its
successor) ceases to serve as the duly authorized agent, the offsets against the
Company's obligations to the Employee and the Employee's Spouse or
Beneficiary(ies) under the Supplemental Plans shall be determined by assuming
(a) that the value of Trust assets last reported by the trustee to Xxxxxx Xxxxxx
(or its successor) prior to such date is accumulated with earnings at the rate
specified in the second sentence of Section 6.1 (treating the immediately
preceding
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December as the date for determining such rate) and (b) that all subsequent
distributions from the Trust occur at the proper times and in the proper
amounts.
VI. Attachment of Trust Assets
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6.1 The Employee understands and agrees that in the event all or a
portion of the funds in the Trust are attached by court order or other legal
process or are otherwise alienated, the offset against any amounts otherwise
payable under the Supplemental Plans will be calculated as if the amount so
alienated remained in the Trust, had accumulated with earnings at the same rate
as amounts that actually remain in the Trust, was distributed at the proper
time, and was or is to be offset against benefits otherwise payable from the
Supplemental Plans before any remaining Trust assets were or are distributed. To
the extent that for any calendar year or portion thereof no assets remain in the
Trust, the amounts so alienated shall be deemed to earn interest at the annual
interest rate on 30-year Treasury securities (within the meaning of Internal
Revenue Code section 417(e)(3)) for the month of December preceding the first
year in which no assets remain in the Trust, reduced by estimated federal, state
and local income taxes on the deemed earnings using the tax assumptions set
forth in Exhibit B. The Employee agrees that the value of any amounts so
alienated, and the earnings that would have accumulated thereon, shall be offset
against a like amount of After-Tax Benefit, and shall discharge the Company's
liability to the Employee to the extent of the corresponding pre-tax benefit
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otherwise payable to the Employee or his Beneficiary(ies) under the
Supplemental Plans.
6.2 The Employee's Spouse understands and agrees that should any
amounts under the Trust be assigned to her under a domestic relations order or
otherwise, the offset against any amounts otherwise payable under the
Supplemental Plans will be calculated in the manner set forth in Section 6.1 as
if the amount so alienated had remained in the Trust, accumulated earnings, and
been distributed at the proper time. The Employee's Spouse agrees that if she
also claims entitlement to benefits under the Supplemental Plans, the value of
the amount alienated under the Trust, and the earnings that would have
accumulated thereon absent such alienation, shall be offset against a like
amount of After-Tax Benefit, and shall discharge the Company's liability to the
Employee and the Employee's Spouse to the extent of the corresponding pre-tax
benefit otherwise payable to the Employee or the Employee's Spouse under the
Supplemental Plans.
VII. Termination
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7.1 This Enrollment Agreement shall terminate 30 days after the date
the Trust terminates.
7.2 Notwithstanding the above, during the lifetime of the Employee,
this Enrollment Agreement may be terminated at any time by the Company or the
Employee by providing 30 days written notice to all parties. Any such
termination shall operate on a prospective basis only and shall not operate to
release the funds already in the Trust or to otherwise alter the application of
the terms of this Enrollment Agreement to such funds.
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VIII. Miscellaneous
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8.1 Nothing in this Agreement shall be construed to confer upon the
Employee the right to continue in the employment of the Company, or to require
the Company to continue the employment of the Employee.
8.2 This Agreement shall be binding upon and inure to the benefit of
the Company, it successors and assigns and the Employee or his Beneficiary(ies)
and the Employee's Spouse and their heirs, executors, other successors in
interest, administrators, and legal representatives.
8.3 The validity and interpretation of this Agreement shall be governed
by the laws of the State of New York.
8.4 The Employee's Beneficiary(ies) shall be determined in accordance
with the terms of the trust agreement pursuant to which the Trust is maintained.
8.5 Change of Control. For the purpose of this Agreement, a "Change of
Control" shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) of 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of Xxxxxx Xxxxxx (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of Xxxxxx Xxxxxx entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities");
provided, however,
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that the following acquisitions shall not constitute a Change of Control:
(i) any acquisition directly from Xxxxxx Xxxxxx; (ii) any acquisition by
Xxxxxx Xxxxxx, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by Xxxxxx Xxxxxx or any corporation controlled
by Xxxxxx Xxxxxx or (iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of subsection
(c) of this Section 8.5; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
Xxxxxx Xxxxxx'x shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(c) Approval by the shareholders of Xxxxxx Xxxxxx of a
reorganization, merger, share exchange or consolidation (a "Business
Combination"), in each case, unless, following such Business Combination, (i)
all or substantially all of the individuals and entities who were the beneficial
owners,
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respectively, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 80% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a result of
such transaction owns the Company through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, or (ii) no Person (excluding any
employee benefit plan (or related trust) or Xxxxxx Xxxxxx or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
(d) Approval by the shareholders of Xxxxxx Xxxxxx of (i) a complete
liquidation or dissolution of Xxxxxx Xxxxxx or (ii)
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the sale or other disposition of all or substantially all of the assets of
Xxxxxx Xxxxxx, other than to a corporation, with respect to which following such
sale or other disposition, (A) more than 80% of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such sale
or other disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be, (B)
less than 20% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by any Person
(excluding any employee benefit plan (or related trust) of Xxxxxx Xxxxxx or such
corporation), except to the extent that such Person owned 20% or more of the
Outstanding Company Common Stock or Outstanding Company Voting Securities prior
to the sale or disposition and (C) at least a majority of the members of the
board of directors of such corporation were members of the Incumbent Board at
the time of the execution of the initial
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agreement, or of the action of the Board, providing for such sale or other
disposition of assets of Xxxxxx Xxxxxx or were elected, appointed or nominated
by the Board; or
(e) the entry of an order for relief against Xxxxxx Xxxxxx issued
pursuant to any chapter of the United States Bankruptcy Code, as amended.
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IN WITNESS WHEREOF, the Employee, the Employee's Spouse, [and] Xxxxxx
Xxxxxx [and Subsidiary] have caused this Agreement to be executed as of the day
and year first above written.
Attest:
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Signature of Employee
Attest:
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Signature of Employee's Spouse
Attest:
Xxxxxx Xxxxxx Companies Inc.
By:
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Attest: [Subsidiary]
By:
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EXHIBIT B
Tax Assumptions
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Federal income tax rate: the highest marginal Federal income tax rate as
adjusted for the Federal deduction of state and local taxes and the phase out of
Federal deductions under current law (or as adjusted under any subsequently
enacted similar provisions of the Internal Revenue Code).
State income tax rate: the highest adjusted marginal state income tax rate based
on the Employee's or Beneficiary's state of residence.
Local income tax rate: the highest adjusted marginal local income tax rate based
on the Employee's or Beneficiary's locality of residence.
Exceptions: While the Employee is actively employed, the state and local tax
rate assumptions used to determine the appropriate deduction from a Funding
Payment for state and local taxes, and the appropriate amount of such taxes on
Company payments to provide for the taxes due on earnings of the Trust, will
generally be based on the Employee's work location rather than his residence.
With respect to New York City tax, however, status as a non-resident will be
taken into account.
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EXHIBIT A
EMPLOYEE GRANTOR TRUST AGREEMENT
THIS TRUST AGREEMENT made the ______________ day of
_____________________, 1995 between [EXECUTIVE'S NAME] (hereinafter called the
Grantor) and XXXXXX GUARANTY TRUST COMPANY OF NEW YORK (hereinafter called the
Trustee),
W I T N E S S E T H T H A T:
WHEREAS, the Grantor desires to establish and maintain a trust
(hereinafter referred to as the "Trust Fund") to hold certain cash payments
actually or constructively received by the Grantor in lieu of certain future
payments the Grantor would otherwise be entitled to receive from Xxxxxx Xxxxxx
Companies Inc. (hereinafter referred to singularly as "Xxxxxx Xxxxxx") or its
subsidiaries (Xxxxxx Xxxxxx and its subsidiaries being collectively hereinafter
referred to as the "Companies") pursuant to the terms of the nonqualified
supplemental benefit plans specified in Schedule A annexed hereto (hereinafter
referred to as the Plans); and
WHEREAS, the Grantor has entered into certain agreements with the
Companies specifying the manner and extent to which amounts he will receive as
payments from the Trust Fund reduce the payments he would otherwise be entitled
to receive pursuant to the terms of the Plans or from other arrangements with
the Companies; and
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WHEREAS, the Grantor has appointed Xxxxxx Xxxxxx to act as his agent in
connection with certain matters pertaining to the administration of the Trust
Fund;
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the Grantor hereby conveys and assigns to the Trustee, and the
successors or assigns of the Trustee, the sum of ______________ dollars
($___________ ), the receipt of which is hereby acknowledged by the Trustee,
to have and to hold the said sum together with any additions thereto upon the
following express trust and with the powers, authorities and discretions
hereinafter conferred:
ARTICLE I
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Introduction
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I. (1). Name. This agreement and the trust hereby evidenced may be
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referred to as the "[Executive's Name] Employee Grantor Trust."
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I. (2). The Trust Fund. The "Trust Fund" as at any date means all
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property then held by the Trustee under this agreement.
I. (3). Status of the Trust. The trust shall be irrevocable until such
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time as the Grantor (or, in the event of the Grantor's death, the Grantor's
Beneficiaries, as defined in Section VI. (8). below) and the Administrator
provide written certification to the Trustee that all obligations of the
Companies to the Grantor and his Beneficiaries have been satisfied. The trust is
intended to
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constitute a grantor trust under which the Grantor is treated as grantor and
owner pursuant to Sections 671 - 678 of the Internal Revenue Code of 1986, as
amended, and shall be construed accordingly. Neither the Companies nor any
person other than the Grantor and, in the event of the Grantor's death, the
Grantor's Beneficiaries, and the Trustee acting as such, have any right, title
or interest in the assets of the Trust Fund.
I. (4). The Administrator. Xxxxxx Xxxxxx shall be the "Administrator"
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for purposes of this Trust and shall have certain powers, rights and duties
under this agreement as described below; provided that, Xxxxxx Xxxxxx may from
time to time designate a person or persons to act as the Administrator on its
behalf or to carry out certain duties of the Administrator. Xxxxxx Xxxxxx will
certify to the Trustee from time to time the person or persons authorized to act
on behalf of Xxxxxx Xxxxxx as the Administrator. The Trustee may rely on the
latest certificate received without further inquiry or verification.
Notwithstanding any provision herein, in the event of a Change of Control of
Xxxxxx Xxxxxx (as defined in the most recently executed Employee Grantor Trust
Enrollment Agreement entered into by Xxxxxx Xxxxxx and the Grantor), the Grantor
may remove Xxxxxx Xxxxxx (or its successor) and any designee of Xxxxxx Xxxxxx as
Administrator by delivering to both Xxxxxx Xxxxxx (or its successor) and the
Trustee within any period of two days written notice of such removal. The
Trustee may rely upon any notice of
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removal received from the Grantor without further inquiry or verification,
unless Xxxxxx Xxxxxx (or its successor) provides to the Trustee (within 10 days
following the Trustee's receipt of the notice of removal from the Grantor)
written notice certifying that no change in control has occurred. In the event
the Grantor removes Xxxxxx Xxxxxx as Administrator, the Grantor shall appoint a
successor Administrator, who may be the Grantor, a committee of persons
including the Grantor, or such other person or persons as shall be reasonably
acceptable to the Trustee, and shall notify the Trustee of the appointment. In
such event, the Grantor shall also have the authority to, from time to time,
remove the person or persons so appointed and appoint such other person or
persons as shall be reasonably acceptable to the Trustee.
I. (5). Acceptance. The Trustee accepts the duties and obligations of
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the "Trustee" hereunder, agrees to accept funds delivered to it on behalf of the
Grantor, and agrees to hold such funds (and any proceeds from the investment of
such funds) in trust in accordance with this agreement; provided that the
Trustee reserves the right to determine whether to accept the transfer of any
property other than cash proposed to be transferred to it.
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ARTICLE II
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Distribution of the Trust Fund
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II. (1). The Trustee shall hold, manage, invest and reinvest the Trust
Fund, shall collect the income therefrom and, after deducting all proper
charges, shall pay or apply to or for the benefit of the Grantor (or, in the
event of the Grantor's death, the Grantor's Beneficiaries) so much, including
all, of the net income and principal of the Trust Fund as is set forth in a
schedule of payments provided to the Trustee by the Administrator. The
Administrator shall be responsible for providing the Trustee with all necessary
information as to the Grantor's current address, beneficiary designations, and
the form in which and time at which payments are to be made. The Trustee shall
incur no liability to the Grantor or any other person interested in the Trust
Fund for any action or any omission in reliance upon information provided by the
Administrator.
II. (2). The Trustee shall also distribute to the Grantor at least
annually such amount(s), if any, as the Administrator may certify to the Trustee
is (are) necessary to pay tax obligations of the Grantor resulting from earnings
on the Trust Fund or from additional amounts actually or constructively received
by the Grantor from the Companies and contributed to the Trust Fund.
II. (3). All income not so paid or applied shall be accumulated and
added to principal of the Trust Fund.
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II. (4). This trust shall terminate on the first business day of the
Trustee following the date ninety (90) days after receipt by the Trustee of
written certification by the Grantor (or in the event of the Grantor's death,
the Grantor's Beneficiaries) and the Administrator that all obligations of the
Companies to the Grantor and his Beneficiaries have been satisfied, at which
time the Trustee shall transfer and pay over the principal of the Trust Fund,
together with any undistributed income on hand and accrued income, as then
constituted to the Grantor, if living, or the Beneficiaries designated by the
Grantor, in the event of his death.
ARTICLE III
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The Trustee
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III. (1). Any corporation resulting from any merger, conversion,
reorganization or consolidation to which any corporation acting as Trustee
hereunder shall be a party, or any corporation to which shall be transferred all
or substantially all of any such corporation's trust business, shall be the
successor of such corporation as Trustee hereunder, without the execution or
filing of any instrument or the performance of any further act and shall have
the same powers, authorities and discretions as though originally named in this
Trust Agreement.
III. (2). The Trustee may resign by giving ninety (90) days' advance
written notice to the Grantor and the
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Administrator. The Administrator, as agent for the Grantor, may remove a Trustee
by giving ninety (90) days advance written notice to the Trustee and the
Grantor. The Administrator may appoint a successor Trustee by written notice
signed by the Administrator and delivered to the Trustee and the Grantor (or,
in the event of the Grantor's death, his Beneficiaries). If a successor Trustee
is not appointed within ninety (90) days of the Trustee's resignation, the
Trustee may apply to a court of competent jurisdiction for the appointment of
a successor.
III. (3). The Trustee shall be entitled to such compensation for its
services in any fiduciary capacity hereunder as the Administrator, as agent for
the Grantor, or the Grantor, and the Trustee may from time to time agree,
including minimum fees and additional compensation for special investments and
services, notwithstanding that such stipulated compensation shall be greater
than that now in effect or than that provided from time to time under applicable
law, and such compensation and reimbursement for reasonable expenses may be paid
at any time without court approval. Such compensation shall be paid from the
Trust Fund to the extent that it is not paid by the Administrator or the
Grantor.
III. (4). No bond or other security shall be required of any trustee in
any jurisdiction, whether for the faithful performance of duties, to secure
payment of commissions in advance or otherwise, and if, notwithstanding
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this express direction, any such bond or security shall be required by any law,
statute or rule of court, no surety shall be required thereon.
ARTICLE IV
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Trustee Reporting
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IV. (1). The Trustee shall furnish the Administrator with statements of
transactions in the trust and statements of the market value of the Trust Fund
at least monthly, and the Administrator and the Grantor with a statement of
trust investments including the market value thereof at least annually. The
failure of both the Grantor and the Administrator to object to any matter
contained in such statements by written notice signed by either the Grantor or
the Administrator within ninety (90) days after receipt of the same shall
constitute the Grantor's assent to such statements and shall be final and
binding as to all matters contained in such statements upon the Grantor, the
Administrator as agent for the Grantor, and all persons, whether or not in
being, interested in the Trust Fund. In addition, the Grantor may execute a
release, with or without an account, approving the administration of the trust.
A release shall discharge the Trustee from any accountability and liability to
the Grantor, the Grantor's legal representatives, or any persons, whether or not
in being, interested in the Trust Fund, with the same effect as if the account
of the Trustee were judicially settled and allowed.
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IV. (2). The Trustee shall also furnish the Administrator or the
Grantor with such other information relating to the actual or estimated income
of the Trust Fund, including the character of such income, and to estimated
taxes resulting from such income as the Trustee and the Administrator may from
time to time agree is necessary or desirable to assure appropriate reporting and
payment of taxes by or on behalf of the Grantor.
IV. (3). The Grantor and the Administrator, or such persons as may be
designated by them, shall at any time upon five days' advance written notice to
the Trustee have the right to examine, during the normal business hours of the
Trustee, all books and records of the Trustee pertaining to the Trust Fund.
ARTICLE V
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Investment and Administrative Authority
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V. (1). In addition to any powers conferred by law, the Trustee shall
have the following powers, authorities and discretions with respect to any
property, real or personal, at any time held under any provision hereof and may
exercise the same with sole and absolute discretion and without the order or
approval of any court, and the Grantor intends that such powers, authorities and
discretions (including the following) be construed in the broadest possible
manner:
(a) To retain any such property without regard to the
proportion any such property or similar property held may bear to the
entire amount held and without any
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obligation to diversify the same, whether or not the same is of the
kind in which fiduciaries are authorized by law or any rule of court
to invest funds;
(b) To sell any such property upon such terms and conditions
as may be deemed advisable, at public or private sale, for cash or on
credit for such period of time as may be deemed advisable, or partly
for cash and partly on credit, and with or without security, without
obligation to "test the market" by soliciting offers from a third party
or to obtain an appraisal to establish the value thereof; and the
purchaser of such property shall have no obligation to inquire as to
the use or application of the proceeds of sale; to exchange any
property held hereunder upon such terms and conditions as may be deemed
advisable; and to grant warranties, guaranties, indemnities or options
with respect to any of the foregoing without regard to the duration of
any trust or any time limitation imposed by law;
(c) To invest and reinvest in and to acquire by purchase,
exchange or otherwise property of any character whatsoever, foreign or
domestic, or interests or participations therein, including by way of
illustration and not of limitation: real property, mortgages, bonds,
notes, debentures, certificates of deposit, options, puts, calls,
warrants, partnerships, common and preferred stocks, annuity contracts,
futures contracts, forward contracts, short sales and swap contracts,
in each case whether foreign or domestic and with respect to financial
instruments and any group or index of securities (or any interest
therein based upon the value thereof) and in connection therewith to
deposit any property as collateral with any agent and to grant security
interests in such collateral and shares or interests in investment
trusts, mutual funds or common trust funds (including without
limitation common trust funds maintained by a corporate fiduciary and
other trusts or funds with respect to which the Trustee or its
affiliates acts as investment advisor or custodian or provides other
services), without regard to the proportion any such property or
similar property held may bear to the entire amount held and without
any obligation to diversify, whether or not the same is of the kind in
which fiduciaries are authorized by law or any rule of court to invest
funds;
(d) To participate in and to consent to any plan of
reorganization, recapitalization, consolidation, merger, combination,
dissolution, liquidation or similar plan and any action thereunder,
including by way of illustration and not of limitation to receive and
retain property under any such plan whether or not the same is
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of the kind in which fiduciaries are authorized by law or any rule of
court to invest funds;
(e) To exercise all conversion, subscription, voting and other
rights of whatsoever nature pertaining to any such property and to
grant proxies, discretionary or otherwise, with respect thereto; to
appoint voting trustees under voting trust agreements and to delegate
to such voting trustees the power to vote and all other powers,
authorities and discretions usually conferred upon trustees under
voting trust agreements;
(f) To borrow such sums of money at any time and from time to
time for such periods of time upon such terms and conditions from such
persons or corporations (including any fiduciary hereunder) for such
purposes as may be deemed advisable, and to secure such loans by the
pledge or hypothecation of any property held hereunder; and the lender
shall have no obligation to inquire as to the application of the sums
loaned or as to the necessity, expediency or propriety of the loan;
(g) To register and hold any property of any kind, whether
real or personal, at any time held hereunder in the name of a nominee
or nominees and to hold any such personal property in any State; and to
receive and keep any stocks, bonds or other securities unregistered or
in such condition that title thereto will pass by delivery;
(h) To distribute (including in satisfaction of any pecuniary
disposition) any property in kind at market value unless otherwise
directed herein or in cash, or partly in kind and partly in cash, and,
without the consent of any beneficiary, to allocate among the
recipients the property distributed in kind (including in satisfaction
of any pecuniary disposition) in divided or undivided interests and
without any obligation to make proportionate distributions or any
obligation to distribute to all recipients property having an
equivalent Federal income tax cost;
(i) To allocate to principal all dividends and distributions
payable in property or in stocks, bonds or other securities whether of
the disbursing company or another company;
(j) After the termination of the trust hereunder to exercise
all the powers, authorities and discretions herein conferred until the
complete distribution of the property held hereunder;
(k) To accept additional property transferred on behalf of the
Grantor;
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(l) To remove all or any part of the assets of or the situs of
administration of the trust hereunder from one jurisdiction to another
jurisdiction, either within or without the United States of America, at
any time or from time to time;
(m) To employ investment counsel, accountants, depositories,
custodians, brokers, consultants, agents, attorneys and other
employees, irrespective of whether any person or entity so employed
shall be a fiduciary hereunder or shall be a corporate affiliate of a
fiduciary hereunder and irrespective of whether any entity so employed
shall be one in which a fiduciary hereunder shall be a partner,
stockholder, director, officer or corporate affiliate or shall have any
interest, and to pay the usual compensation for such services out of
principal or income as may be deemed advisable; and such compensation
may be paid without diminution of or charging the same against the
commissions or compensation of any fiduciary hereunder; and any
fiduciary who shall be a partner, stockholder, director, officer or
corporate affiliate in any such entity shall nevertheless be entitled
as partner, stockholder, director, officer or corporate affiliate to
receive such fiduciary's share of the compensation paid to such entity;
(n) To exercise any and all of the powers, authorities and
discretions conferred hereunder in respect of any securities of any
corporate fiduciary acting hereunder, or in respect of any securities
of any holding company or corporation owning securities of any
corporate fiduciary acting hereunder; and
(o) To act in any jurisdiction where permitted by law, or to
designate one or more persons or a corporation to be ancillary
fiduciary who shall serve without bond or security in any jurisdiction
in which ancillary administration may be necessary; and to negotiate
and determine the compensation to be paid to such ancillary fiduciary
whether or not any compensation would otherwise be authorized by law,
and to pay such compensation out of principal or income or both; and
such ancillary fiduciary shall have with respect to any and all
property subject to the ancillary administration all powers,
authorities and discretions granted in this Article; provided, however,
that any action which may require the investment of additional funds or
the assumption of additional obligations shall not be undertaken
without prior written consent of the fiduciary or fiduciaries acting
hereunder; and if by reason of the law of any jurisdiction in which it
may be necessary to perform any act any fiduciary hereunder may be
disqualified from acting, then all of the acts
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required to be performed in such jurisdiction may be performed by such
fiduciary's qualified co-fiduciary or co-fiduciaries then acting
hereunder.
V. (2). Notwithstanding the provisions of Section V. (1). hereof,
(a) The Administrator, as agent for the Grantor, shall have
the authority to establish and deliver to the Trustee from time to time
written investment guidelines setting forth the parameters within which
the Trustee shall exercise its discretionary authority with respect to
the investment of the Trust Fund subject to the restrictions on
investments set forth above, and the Trustee shall have no liability to
the Administrator, the Companies, the Grantor or any other person
interested in the Trust Fund for any action or any omission in reliance
upon such guidelines;
(b) The Administrator, as agent for the Grantor, is authorized
to receive any disclosures or other notices delivered by the Trustee
with respect to the investment of the Trust Fund in shares or interests
in investment trusts or mutual funds with respect to which the Trustee
or any of its affiliates acts as investment advisor or custodian or
provides other services;
(c) In no event may the Trust Fund be invested in securities
(including stock or rights to acquire stock) or obligations issued by
the Companies, other than a de minimis amount held in common investment
vehicles in which the Trustee invests; and
(d) The Trustee and its affiliates shall discharge their
duties with respect to the Trust Fund solely in the interest of the
Grantor and his Beneficiary(ies), for the exclusive purpose of
accumulating assets to make distributions as provided in Article II
hereunder and paying the reasonable expenses of administering the
trust.
ARTICLE VI
----------
General Provisions
------------------
VI. (1). This Trust Agreement and the trust created hereunder shall be
construed, regulated and governed in all respects, not only as to administration
but also as to
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validity and effect, by the laws of the State of New York in effect from
time to time.
VI. (2). The references in this Trust Agreement to the Internal Revenue
Code shall mean the Internal Revenue Code of 1986, as amended, and shall include
corresponding provisions of all subsequently enacted Federal tax laws.
VI. (3). Any provision of the Trust Agreement prohibited by law, or
which would cause the trust to any extent to fail or cease to be a grantor trust
as described in Section I. (3). hereof, shall be to such extent ineffective,
without invalidating the remaining provisions hereof.
VI. (4). Amounts held in the Trust Fund may not be anticipated,
assigned, alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process, except to the
extent specifically permitted herein or as otherwise required by law.
VI. (5). Any notice required under this Trust Agreement shall be
delivered (a) personally, (b) by next day courier service (e.g., Federal
----
Express or UPS), or (c) by certified or registered mail, return receipt
requested, addressed as follows (or to such other address as any party may so
notify the other party):
If to the Trustee:
Xxxxx X. Xxxxx, Vice President
Xxxxxx Guaranty Trust Company of New York
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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If to the Grantor:
If to the Administrator:
Xxxxxx Xxxxxx Companies Inc.
Attention: Vice President,
Corporate Human Resources
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Any notice required under this Trust Agreement may be waived by the person
entitled to such notice. Any notice to or from the Grantor under this Trust
Agreement shall, in the event of the Grantor's death, be provided to or by
the Beneficiary(ies) designated by the Grantor under this Trust Agreement. If
more than one beneficiary has been designated, the Grantor shall designate one
Beneficiary who shall be entitled to provide any notice required to the
Administrator or Trustee.
VI. (6). This Agreement shall be binding on all persons entitled to
payments from the Trust Fund and their respective heirs and legal
representatives, and on the Trustee and its successors.
VI. (7). The Administrator, acting on behalf of the Grantor, may from
time to time amend this Trust Agreement in any respect, provided, however, that
no such amendment shall change the duties, responsibilities, or compensation of
the Trustee without its written consent or shall cause any amount held in the
Trust Fund to be payable to the Companies or to any person other than the
Grantor, his Beneficiaries,
-15-
his estate, or to the Trustee as compensation for services, or reimbursement
for payment to its agents.
VI. (8). In general, a Grantor's Beneficiary(ies) shall be the
beneficiary(ies) designated by the Grantor or otherwise determined under the
terms of the Plans. In the event, however, that no survivor's benefit or other
death benefit is payable on behalf of the Grantor under one or more Plans, the
Trust Fund shall first be applied to make payments due under any Plan for which
a death benefit is payable; any balance remaining in the Trust Fund following
payment of all death benefits under the Plans shall be paid in one lump sum in
cash to the Beneficiary(ies) designated by the Grantor hereunder. A beneficiary
designation under this Trust Agreement shall be made in writing by the Grantor
in such manner and on such form as shall be specified by the Administrator, and
a designation shall not be effective until it has been filed with the
Administrator. In the absence of a beneficiary designation hereunder or the
failure of the Beneficiary to survive, the Beneficiary shall be the Grantor's
spouse, if any, and, if none his estate.
-16-
IN WITNESS WHEREOF, the Grantor has hereunto set his hand and seal and
the undersigned corporate party has caused this Trust Agreement to be executed
and its seal affixed hereunto by its officers duly authorized and directed all
as of the day and year first above written.
_____ __________________________(L.S.)
[Executive's Name], Grantor
Xxxxxx Guaranty Trust Company
of New York, Trustee
BY__________________________________
Attest:
__________________________
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Schedule A
----------
[List relevant plans and arrangements]
-18-
STATE OF )
) ss.:
COUNTY OF )
On this _________ day of ____________, 19__, before me personally came
[EXECUTIVE'S NAME], to me known and known to me to be the same person described
in and who executed the foregoing instrument, and acknowledged to me that such
person executed the same.
______________________________
-19-
STATE OF )
) ss.:
COUNTY OF )
On this ______________ day of _____________, 199__, before me
personally came ___________________________, to me known, who, being by me duly
sworn, did depose and say that such person resides at _________________________
in the City of, _____________________________, County of ______________________,
State of ___________________________; that such person is a ____________________
of XXXXXX GUARANTY TRUST COMPANY OF NEW YORK, the corporation described in and
which executed the foregoing instrument; that such person knows the seal of
said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that such person signed such person's name thereto by
like order.
______________________________
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BENEFICIARY DESIGNATION
EMPLOYEE GRANTOR TRUST
----------------------
I understand that assets of the Employee Grantor Trust (the "Grantor
Trust") established with Xxxxxx Guaranty Trust Company of New York will be
applied to pay benefits to me or on my behalf under the nonqualified
supplemental benefit plans specified in Schedule A attached to the Grantor Trust
(the "Plans"). Generally, the beneficiary(ies) entitled to receive benefits
under the Grantor Trust in the event of my death shall be the beneficiary(ies)
designated or otherwise determined under the terms of the Plans. If, however,
after my death any assets of the Grantor Trust remain after all payments due
under the Plans have been made to me or to my beneficiary(ies) under the Plans,
those remaining assets of the Grantor Trust shall be paid to the beneficiary
designated below. I understand that my spouse must consent to the designation of
any beneficiary other than my spouse. I further understand that in the event my
beneficiary does not survive, any remaining assets of the Grantor Trust will be
paid to my spouse, if any, or if none, my estate. [To designate more than one
beneficiary, attach additional sheet(s) with the name, SSN and address of each
beneficiary, indicate each beneficiary's share and which beneficiary is entitled
to provide notices regarding the Grantor Trust, and obtain spouse's consent in
the same form as below.]
Name of Beneficiary:___________________________________________________________
Social Security Number:________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________________
_________________________________ ________________________________________
Date Signature of Employee
____________________________________
Witness
CONSENT OF SPOUSE
-----------------
I understand that I am entitled to be designated as the 100%
beneficiary of the Grantor Trust. I give my consent to the designation of the
above-named beneficiary. I am aware that in the event of my spouse's death, I
will not receive 100% of the remaining assets of the Grantor Trust, and I may
not receive any such assets. [Spouse's consent must be witnessed by the
Administrator or a Notary Public.]
_______________________________ _____________________________________
Date Signature of Employee's Spouse
_______________________________________
Administrator or Notary Public
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ADDITIONAL BENEFICIARY DESIGNATION
----------------------------------
Name of Beneficiary:___________________________________________________________
Social Security Number:________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________________
Beneficiary Share:_____________________________________________________________
Name of Beneficiary:___________________________________________________________
Social Security Number:________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________________
Beneficiary Share:_____________________________________________________________
Name of Beneficiary:___________________________________________________________
Social Security Number:________________________________________________________
Address:_______________________________________________________________________
_______________________________________________________________________________
Beneficiary Share:_____________________________________________________________
_________________________________ _______________________________________
Date Signature of Employee
_________________________________
Witness
CONSENT OF SPOUSE
-----------------
I understand that I am entitled to be designated as the 100%
beneficiary of the Grantor Trust. I give my consent to the designation of the
above-named beneficiary. I am aware that in the event of my spouse's death, I
will not receive 100% of the remaining assets of the Grantor Trust, and I may
not receive any such assets. [Spouse's consent must be witnessed by the
Administrator or a Notary Public.]
_________________________________ _______________________________________
Date Signature of Employee's Spouse
_______________________________________
Administrator or Notary Public
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