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EXHIBIT 10.1
TRUST AGREEMENT
THIS IS AN AGREEMENT ("Agreement") made April 12, 1999, by and between
VLASIC FOODS INTERNATIONAL INC., a corporation organized under the laws of New
Jersey ("Company"), and WACHOVIA BANK, N.A., a national banking association
("Trustee").
The BACKGROUND of this Agreement is as follows:
1. Company and certain of its affiliates have established and
maintain the plans and arrangements (collectively, the "Plans") listed in
Appendix A, attached hereto and made a part hereof.
2. Company and its affiliates that have adopted the Plans have
incurred or expect to incur liability under the terms of such Plans with respect
to the individuals participating in such Plans. The affiliates that have adopted
the Plans for their eligible employees ("Affiliates") are listed in Appendix B,
attached hereto and made a part hereof.
3. Company wishes to establish a trust (the "Trust") and, along
with its Affiliates, to contribute to the Trust assets that shall be held
therein, subject to the claims of the respective general creditors of Company or
its Affiliates, in the event of the insolvency, as herein defined, of Company or
its Affiliates, until paid to participants in the Plans ("Participants") and
their beneficiaries in such manner and at such times as specified in the Plans.
4. It is the intention of the parties that the Trust established
under this Agreement shall constitute an unfunded arrangement and shall not
affect the status of the Plans as unfunded plans and arrangements maintained for
the purpose of providing deferred
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compensation for a select group of management or highly compensated employees
for the purposes of Title I of the Employee Retirement Income Security Act of
1974, as amended.
5. It is also the intention of Company and its Affiliates to make
contributions to the Trust to provide themselves with a source of funds to
assist them in the meeting of their respective liabilities under the Plans.
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
Section 1. Establishment of Trust.
(a) Company and its Affiliates hereby deposit with Trustee in
trust cash and/or marketable securities, if any, reasonably acceptable to
Trustee, which shall become the principal of the Trust to be held, administered
and disposed of by Trustee as provided in this Agreement.
(b) The Trust hereby established is revocable by Company; provided
that it shall become irrevocable upon a Change in Control, as defined in Section
14(e).
(c) The Trust is intended to be a grantor trust, of which Company
and the Affiliates are grantors, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as
amended ("Code"), and shall be construed accordingly.
(d) The principal of the Trust, and any income, gain or loss
thereon, shall be held separate and apart from other funds of Company and the
Affiliates. A separate account shall be established and maintained for Company
and each of its Affiliates that makes contributions to the Trust. Amounts held
in each such separate account shall be used exclusively for the uses and
purposes of Participants employed by Company or the Affiliate for which the
separate account is
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maintained, the beneficiaries of such Participants, the general creditors of
Company or the Affiliate, or to pay the expenses of the Trust, as herein set
forth. No amount held in a separate account for Participants employed by one
employer may be applied to meet the liabilities to Participants employed by
another employer prior to the date that all obligations of the former have been
fully discharged. Participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plans and this Agreement shall be mere unsecured
contractual rights of the Participants and their beneficiaries against the
respective employers of such Participants. Any assets held by the Trustee shall
be subject to the claims of the respective general creditors of Company and its
Affiliates, under federal and state law in the event of insolvency, as defined
in Section 3(a).
(e) Company and any Affiliate may at their discretion and at any
time, or from time to time, make deposits of cash or other property reasonably
acceptable to Trustee in trust with Trustee to augment the principal to be held,
administered and disposed of by Trustee as provided in this Agreement. Prior to
a Change in Control, as defined in Section 14(e), neither Trustee nor any
Participant or beneficiary shall have any right to compel such deposits.
(f) Upon a Change in Control, Company together with each of its
Affiliates shall, as soon as possible, but in no event later than 10 business
days following the Change in Control, as defined in Section 14(e), make an
irrevocable contribution to the Trust in an amount that, together with amounts
then held hereunder, is sufficient to pay each Participant or beneficiary the
benefits to which Participants or their beneficiaries would be entitled pursuant
to the terms of the Plans as of the date on which the Change in Control
occurred. In addition, the Company shall fund a one-time Expense Reserve of
$100,000 at such time to cover the legal, accounting and other costs of the
Trustee.
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(g) Following a Change in Control, Company and its Affiliates
shall continue to make contributions to the Trust to fully fund additional
benefits as they are earned by the Participants under the Plans no less
frequently than monthly, and the Trustee may, in its discretion, compel a
contribution that is required to be made to the Trust under this Section 1(g) or
Section 1(f) or that is necessary to make up any shortfall.
Section 2. Payments to Plan Participants and Their Beneficiaries.
(a) Company shall deliver to Trustee annually, prior to a Change
in Control, and at least annually after a Change in Control, a schedule (the
"Payment Schedule") that indicates the amounts payable in respect of each
Participant (and his or her beneficiaries), and that provides a formula or other
instructions acceptable to Trustee for determining the amounts so payable, the
form in which such amount is to be paid (as provided for or available under the
Plans), and the time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to Participants and their
beneficiaries in accordance with such Payment Schedule. The Trustee shall make
provision for the reporting and withholding of any federal, state or local taxes
that may be required to be withheld with respect to the payment of benefits
pursuant to the terms of the Plans and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by Company or an Affiliate, it being understood
among the parties hereto that Company, on behalf of itself and Affiliates, (i)
shall on a timely basis provide Trustee with specific information as to the
amount of taxes to be withheld and (ii) shall be obligated to make provisions to
receive such withheld taxes from Trustee and properly pay and report such
amounts to the appropriate taxing authorities.
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(b) The entitlement of a Participant or his or her beneficiaries
to benefits under the Plans shall be determined by Company or such party as it
shall designate under the Plans, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plans; provided,
however, that following a Change in Control, the final benefit determination
with respect to both entitlement and the amount and timing of benefits for the
Participants and their beneficiaries shall be the sole responsibility of the
Trustee.
(c) Company or its Affiliate may make payment of benefits directly
to Participants or their beneficiaries as they become due under the terms of the
Plans. Company, on behalf of itself and the Affiliates, shall notify Trustee of
the decision to make payment of benefits directly prior to the time amounts are
payable to Participants or their beneficiaries. In addition, if the principal of
the Trust, and any income thereon, are not sufficient to make payments of
benefits in accordance with the terms of the Plans, Company or its Affiliates
shall make the balance of each payment as it falls due, to the extent of their
respective obligations under the Plans. Trustee shall notify Company when
principal and income are not sufficient.
(d) Trustee shall not be liable for payments or liabilities of the
Plans in excess of the fair market value of the Trust's assets.
Section 3. Trustee Responsibility Regarding Payments to Participants and
Beneficiaries When Company or Affiliate Is Insolvent
(a) Trustee shall cease payment of benefits to Participants and
their beneficiaries if the Company or the Affiliate that is liable under the
Plans to pay benefits to those Participants, as the case may be, is insolvent.
Company or its Affiliate shall be considered "insolvent" for purposes of this
Agreement if (i) Company or its Affiliate is unable to pay its
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debts as they become due, or (ii) Company or its Affiliate is subject to a
pending proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided
in Section 1(d) hereof, the principal and income of the respective separate
accounts under the Trust shall be subject to claims of general creditors of
Company or its Affiliates under federal and state law as set forth below.
(1) The board of directors and the chief executive
officer of each of the Company and the Affiliates (or, if there is no chief
executive officer, the highest ranking officer) shall have the duty to inform
Trustee in writing of the insolvency of Company or its Affiliate, as
appropriate. If a person claiming to be a creditor of Company or an Affiliate
alleges in writing to Trustee that it has become insolvent, Trustee shall
determine whether Company or Affiliate is insolvent. Upon receiving notice from
Company or the Affiliate, or from a person claiming to be a creditor, and
pending determination of insolvency, Trustee shall discontinue payment of
benefits to Participants to whom Company or Affiliate is liable for benefits
under the Plans, and alleged to be insolvent, or the beneficiaries of such
Participants.
(2) Unless Trustee has actual knowledge of the insolvency
of Company or its Affiliate, or has received notice from Company, Affiliate, or
a person claiming to be a creditor alleging that Company or Affiliate is
insolvent, Trustee shall have no duty to inquire whether Company or Affiliate is
insolvent. Trustee may in all events rely on such evidence concerning the
solvency of Company or Affiliate as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a determination concerning
solvency of Company or Affiliate.
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(3) If at any time Trustee has determined that Company or
its Affiliate is insolvent, Trustee shall discontinue payments to Participants
(and their beneficiaries) to whom Company or its Affiliate, as appropriate, is
liable to pay benefits under the Plan, and shall hold the assets of the separate
account under the Trust for that entity for the benefit of the general creditors
of such entity. Nothing in this Agreement shall in any way diminish any rights
of Participants or their beneficiaries to pursue their respective rights as
general creditors of Company and its Affiliates with respect to benefits due
under the Plans or otherwise.
(4) Trustee shall resume the payment of benefits to
affected Participants or their beneficiaries in accordance with Section 2 of
this Agreement only after Trustee has determined that Company or its Affiliate
is not insolvent (or is no longer insolvent).
(c) Provided that there are sufficient assets in the appropriate
separate account, if Trustee discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the aggregate amount
of all payments due to affected Participants or their beneficiaries under the
terms of the Plans for the period of such discontinuance, less the aggregate
amount of any payments made to Participants provided for hereunder during any
such period of discontinuance, plus interest on such difference based on the
average interest rate in effect for 30-day Treasury bills over such period of
discontinuance; provided that Company or its Affiliate has given Trustee the
information with respect to such payments made during the period of
discontinuance prior to resumption of payments by Trustee.
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Section 4. Payments to Company and Affiliates.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Company and its Affiliates shall have no right or power to direct
Trustee to return to them or to divert to others any of the Trust assets before
all payments of benefits have been made to Participants and their beneficiaries
from the respective separate accounts pursuant to the terms of the Plans.
Section 5. Investment and Administrative Authority.
(a) Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by Company or its Affiliates; provided that
only securities or obligations issued by the Company or an Affiliate may be held
in the separate account for the Company or such an Affiliate. All rights
associated with assets of the Trust shall be exercised by Trustee or the person
designated by Trustee, and shall in no event be exercised by, or vest with,
Participants, except that voting rights with respect to Trust assets will be
exercised by Company unless an investment adviser has been appointed pursuant to
Section 5(c) and voting authority has been delegated to such investment adviser.
(b) Company and its Affiliates shall have the right at any time,
and from time to time, in the sole discretion of each, to substitute assets of
equal fair market value for any asset held by the Trust that is attributable to
it. This right is exercised by Company or Affiliates in a nonfiduciary capacity
without the approval or consent of any person in a fiduciary capacity. Following
a Change in Control, any substitution of assets must be acceptable to the
Trustee.
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(c) The Company may appoint one or more investment advisers to
provide investment advice on a discretionary or nondiscretionary basis with
respect to all or a specified portion of the assets of the Trust. Appointed
investment advisers must be registered as investment advisers under the
Investment Advisers Act of 1940. Following a Change in Control, the Trustee may
appoint one or more investment advisers, who may be affiliates of Trustee.
Should the Trustee appoint the investment adviser(s), the Trustee shall remain
fully liable for all investments of the Trust, and all fees, expenses or other
compensation to be paid to such advisers from Trust assets shall be fully
disclosed in advance to Company.
(d) Trustee, or Trustee's designee, is authorized and empowered:
(1) To invest and reinvest Trust assets, together with
the income therefrom, in common stock, preferred stock, convertible preferred
stock, bonds, debentures, convertible debentures and bonds, mortgages, notes,
commercial paper and other evidences of indebtedness (including those issued by
Trustee in its corporate capacity), shares of mutual funds (which funds may be
sponsored, managed or offered by an Affiliate of Trustee), guaranteed investment
contracts, bank investment contracts, other securities, policies of life
insurance, annuity contracts, options to buy or sell securities or other assets,
and all other property of any type (personal or real and tangible or
intangible);
(2) To deposit or invest all or any part of the assets of
the Trust in savings accounts, certificates of deposit or other deposits in a
bank or savings and loan association or other depository institution, including
Trustee or any of its affiliates; provided that, with respect to such deposits
with Trustee or an affiliate, the deposits bear a reasonable rate of interest;
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(3) To hold, manage, improve, repair and control all
property, real or personal, forming part of the Trust; to sell, convey,
transfer, exchange, partition, lease for any term, even extending beyond the
duration of this Trust, and otherwise dispose of the same from time to time;
(4) To hold in cash, for a reasonable period of time,
such portion of the Trust as is pending investment, or payment of expenses, or
the distribution of benefits;
(5) To take such actions as may be necessary or desirable
to protect the Trust from loss due to the default on mortgages held in the
Trust, including the appointment of agents or trustees in such other
jurisdictions as may seem desirable, to transfer property to such agents or
trustees, to grant to such agents such powers as are necessary or desirable to
protect the Trust, to direct such agent or trustee, or to delegate such power to
direct, and to remove such agent or trustee;
(6) To settle, compromise or abandon all claims and
demands in favor of or against the Trust;
(7) To exercise all of the further rights, powers,
options and privileges granted, provided for, or vested in trustees generally
such that the powers conferred upon Trustee herein shall not be in limitation of
any authority conferred by law, but shall be in addition thereto;
(8) To borrow money from any source and to execute
promissory notes, mortgages or other obligations and to pledge or mortgage any
trust assets as security; and
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(9) To maintain accounts at, execute transactions
through, and lend on an adequately secured basis stocks, bonds or other
securities to, any brokerage or other firm, including any firm that is an
affiliate of Trustee.
Section 6. Additional Powers of Trustee.
To the extent necessary or to the extent to which it deems appropriate
to implement its powers under Section 5 or otherwise to fulfill any of its
duties and responsibilities as Trustee of the Trust, Trustee shall have the
following additional powers and authority:
(a) To register securities, or any other property, in its name or
in the name of any nominee, including the name of any affiliate or the nominee
name designated by any affiliate, with or without indication of the capacity in
which property shall be held, or to hold securities in bearer or book-entry form
and to deposit any securities or other property in a depository or clearing
corporation;
(b) To designate and engage the services of, and to delegate
powers and responsibilities to, such agents, representatives, advisers, counsel
and accountants as Trustee considers necessary or appropriate, any of whom may
be an affiliate of Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Agreement, to pay their
reasonable expenses and compensation; provided that all such expenses and
compensation are fully disclosed in advance to Company;
(c) To make, execute and deliver, as Trustee, any and all deeds,
leases, mortgages, conveyances, waivers, releases or other instruments in
writing necessary or appropriate for the accomplishment of any of the powers
listed in this Agreement; and
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(d) Generally to do all other acts that Trustee deems necessary or
appropriate for the protection of the Trust.
Section 7. Disposition of Income.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
Section 8. Accounting by Trustee.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made for each
separate account, including such specific records as shall be agreed upon in
writing between Company and Trustee. Within 90 days following the close of each
calendar year and within 90 days after the removal or resignation of Trustee,
Trustee shall deliver to Company a written account of its administration of the
Trust during such year or during the period from the close of the last preceding
year to the date of such removal or resignation, setting forth all investments,
receipts, disbursements and other transactions effected by it, including a
description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in the Trust at the end of such year or as of the date of such removal or
resignation, as the case may be. Trustee may satisfy its obligation under this
Section 8 by rendering to Company monthly statements setting forth the
information required by this Section separately for the month covered by the
statement.
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Section 9. Responsibility and Indemnity of Trustee.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person acting in like
capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims; provided, however, that
Trustee shall incur no liability to any person for any action reasonably taken
pursuant to a direction, request or approval given by Company or its Affiliate
that is reasonably contemplated by, and in conformity with, the terms of the
Plans and this Agreement and is given in writing. Trustee shall also incur no
liability to any person for failure to act in the absence of direction, request
or approval from Company or its Affiliate that is reasonably contemplated by,
and in conformity with, the terms of this Agreement. In the event of a dispute
between Company or its Affiliate and a third party, Trustee may apply to a court
of competent jurisdiction to resolve the dispute.
(b) Company hereby indemnifies Trustee, and each of its affiliates
identified to the Company in advance in writing as rendering services hereunder
(together with the Trustee, "Indemnified Trustee Party") in accordance with the
terms of this Agreement against, and shall hold them harmless from, any and all
loss, claims, liability, and expense, including reasonable attorneys' fees,
imposed upon or incurred by any Indemnified Trustee Party as a result of any
acts taken, or any failure to act, in accordance with the directions from
Company or any designee of Company, or by reason of the Indemnified Trustee
Party's good faith execution of its duties with respect to the Trust, including,
but not limited to, its holding of assets of the Trust, Company's obligations in
the foregoing regard to be satisfied promptly by Company; provided that in the
event the loss, claim, liability or expense involved is determined by a no
longer appealable final judgment entered in a lawsuit or proceeding to have
resulted from the gross
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negligence, willful misconduct, lack of good faith or breach of fiduciary duty
of any Indemnified Trustee Party, Indemnified Trustee Party shall promptly on
request thereafter return to Company or Affiliate, as appropriate, any amount
previously received by Trustee under this Section with respect to such loss,
claim, liability or expense. If Company or Affiliate does not pay such costs,
expenses and liabilities in a reasonably timely manner, Indemnified Trustee
Party may obtain payment from the appropriate separate account under the Trust
without direction from Company or its Affiliate.
(c) Trustee and each other Indemnified Trustee Party hereby
indemnify Company, its parents, subsidiaries and Affiliates, and each of their
respective officers, directors, and employees ("Indemnified Company Party"),
from and against all loss, claims, liability, and expense, including reasonable
attorneys' fees, imposed upon or incurred by any Indemnified Company Party as a
result of the gross negligence, willful misconduct, lack of good faith or breach
of fiduciary duty of Trustee or any other Indemnified Trustee Party.
(d) Trustee may consult with legal counsel (who may also be
counsel for Company generally) in carrying out its duties or obligations
hereunder.
(e) Trustee may hire and may rely on the advice given by agents,
accountants, actuaries, investment advisers, financial consultants or other
professionals to assist it in performing any of its duties or obligations
hereunder.
(f) Trustee shall have, without exclusion, all powers conferred on
Trustee by applicable law, unless expressly provided otherwise herein; provided,
however, that if an insurance policy is held as an asset of the Trust, Trustee
shall have no power to name a beneficiary of the policy other than the Trust, to
assign the policy (as distinct from conversion of
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the policy to a different form) other than to a successor Trustee, or to lend to
any person the proceeds of any borrowing against such policy.
(g) However, notwithstanding the provisions of Section 9(f) above,
Trustee may lend to Company the proceeds of any borrowing against an insurance
policy held as an asset of the Trust.
(h) Notwithstanding any powers granted to Trustee pursuant to this
Agreement or to applicable law, Trustee shall not have any power that could make
this Trust a "Business Trust," and not an "Ordinary Trust," within the meaning
of Section 301.7701 - 4(a) and (b) of the Procedure and Administrative
Regulations promulgated pursuant to the Code.
Section 10. Compensation and Expenses of Trustee.
Company shall pay all administrative and Trustee's fees and expenses in
accordance with a fee agreement between the parties. If not so paid, the fees
and expenses shall be paid from the Trust. Trustee is authorized, unless
otherwise agreed by Trustee, to withdraw from the Trust without direction from
Company the amount of its fees in accordance with the fee agreement between
Company and Trustee.
Section 11. Resignation or Removal of Trustee.
(a) Subject to Section 11(d), Trustee may resign at any time by
written notice to Company, which shall be effective 30 days after receipt of
such notice unless Company and Trustee agree otherwise.
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(b) Subject to Section 11(c), Trustee may be removed by Company on
30 days notice or upon shorter notice accepted by Trustee.
(c) Upon a Change in Control, as defined in Section 14(e) herein,
Trustee may be removed by Company only after two years from the Change in
Control, and Company shall select a successor Trustee in accordance with the
provisions of Section 12(b) hereof prior to the effective date of the Trustee's
removal.
(d) If Trustee resigns within two years after a Change in Control,
as defined in Section 14(e) herein, Company shall select a successor Trustee in
accordance with the provisions of Section 12(b) hereof prior to the effective
date of the Trustee's resignation.
(e) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all Trust assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 60 days after receipt
of notice of resignation, removal or transfer, unless Company extends the time
limit.
(f) If Trustee resigns or is removed, a successor shall be
appointed in accordance with Section 12 hereof, by the effective date of
resignation or removal under paragraph (a) or paragraph (b) of this section. If
no such appointment has been made, Trustee may apply to a court of competent
jurisdiction for appointment of a successor or for instructions. All reasonable
expenses of Trustee in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
(g) Upon settlement of the account and transfer of the Trust
assets to the successor trustee, all rights and privileges under this Agreement
shall vest in the successor
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trustee and all responsibility of Trustee with respect to the Trust and assets
thereof shall terminate subject only to the requirement that Trustee execute all
necessary documents to transfer the Trust assets to the successor trustee.
Section 12. Appointment of Successor.
(a) If Trustee resigns or is removed in accordance with Section
11(a) or (b) hereof, Company may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state or federal law, as a successor to replace Trustee. The appointment shall
be effective when accepted in writing by the new Trustee, who shall have all of
the rights and powers of the former Trustee, including legal ownership rights in
the Trust assets. The former Trustee shall execute any instrument necessary or
reasonably requested by Company or the successor trustee to evidence the
transfer.
(b) If Trustee resigns or is removed by Company after a Change in
Control in accordance with Section 11(c) or (d), the Company shall select a
successor Trustee. Company may appoint any third party, such as a bank trust
department, with a market capitalization exceeding $10,000,000,000 that may be
granted corporate trustee powers under state or federal law. The appointment of
a successor Trustee shall be subject to the ratification of a majority of the
Participants in the Plans. The majority of Participants shall be determined
based on the Participants' account balances under the Plans. The appointment of
the successor Trustee and the resignation or removal of the former Trustee shall
be effective when the appointment is accepted in writing by the new Trustee. The
new Trustee shall have all the rights and powers of the former Trustee,
including legal ownership rights in Trust assets. The former Trustee shall
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execute any instrument necessary or reasonably requested by the successor
Trustee to evidence the transfer.
(c) The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust assets, subject to
Sections 8 and 9 hereof. The successor Trustee shall not be responsible for any
claim or liability resulting from any action or inaction of any prior Trustee or
from any other past event, or any condition existing at the time it became
successor Trustee.
Section 13. Amendment or Termination.
(a) This Agreement may be amended by a written instrument executed
by Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of any of the Plans or shall make the Trust revocable
after it has become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which
Participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plans, unless sooner revoked in accordance with Section 1(b)
hereof. Nor shall the Trust terminate before all expenses of the Trust have been
paid. Upon termination of the Trust, any assets remaining in a separate account
under the Trust for Company or an Affiliate shall be returned to Company or the
Affiliate, as appropriate.
(c) Upon written approval of all Participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the Plans, Company may
terminate this Trust prior
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to the time all benefit payments under the Plans have been made. Upon
termination of the Trust, and after payment of all fees and expenses of the
Trust, any assets remaining in a separate account under the Trust for Company or
an Affiliate shall be returned to the Company or the Affiliate, as appropriate.
(d) Notwithstanding any other provision in this Agreement, this
Agreement may not be amended within two years after the occurrence of a Change
in Control, as defined in Section 14(e), without the approval of a majority of
the Participants, determined as provided in Section 12(b), except when necessary
to comply with legal or regulatory requirements necessary to maintain the
tax-deferred status of benefits for the Participants.
Section 14. Miscellaneous.
(a) Any provision of this Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to Participants and their beneficiaries under
the Plans or this Trust may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment, garnishment,
levy, execution or other legal or equitable process.
(c) Notwithstanding anything to the contrary contained elsewhere
in this Agreement, any reference to the Plans or provisions of the Plans that
require knowledge or interpretation of the Plans shall impose a duty upon the
Company to communicate such knowledge or interpretation to the Trustee. The
Trustee shall have no obligation to know or
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interpret any portion of the Plans and shall in no way be liable for any proper
action taken contrary to the Plans.
(d) This Agreement shall be governed by and construed in
accordance with the laws of New Jersey.
(e) For purposes of this Agreement, "Change in Control" shall
mean:
(1) The acquisition in one or more transactions by any
"Person" (as the term is used for purposes of Section 13(d) or Section 14(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial
Ownership" (within the meaning of Rule 13d - 3 promulgated under the 1934 Act)
of twenty-five percent (25%) or more of the combined voting power of Company's
then outstanding voting securities (the "Voting Securities"); provided, however,
that for purposes of this Section 14(e), the Voting Securities acquired directly
from Company by any Person shall be excluded from the determination of such
Person's Beneficial ownership of Voting Securities (but such Voting Securities
shall be included in the calculation of the total number of Voting Securities
outstanding); or
(2) The individuals who, as of the later of April 1, 1998
or the first date that the membership of the board of directors of the Company
reaches seven, are members of the board of directors (the "Incumbent Board"),
cease for any reason to constitute at least two-thirds of the board of
directors; provided, however, that if the election, or nomination for election
by Company's shareowners, of any new director was approved by a vote of at least
two-thirds of the Incumbent Board, such new director shall, for purposes of the
Plan, be considered as a member of the Incumbent Board; or
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(3) Approval by shareowners of Company of (i) a merger or
consolidation involving Company if the shareowners of Company, immediately
before such merger or consolidation, do not own, directly or indirectly,
immediately following such merger or consolidation, more than eighty percent
(80%) of the combined voting power of the outstanding Voting Securities of the
corporation resulting from such merger or consolidation in substantially the
same proportion as their ownership of the Voting Securities outstanding
immediately before such merger or consolidation or (ii) a complete liquidation
or dissolution of Company or an agreement for the sale or other disposition of
all or substantially all of the assets of Company; or
(4) Acceptance by shareowners of Company of shares in a
share exchange if the shareowners of Company, immediately before such share
exchange, do not own, directly or indirectly, immediately following such share
exchange, more than eighty percent (80%) of the combined voting power of the
outstanding Voting Securities of the corporation resulting from such share
exchange in substantially the same proportion as their ownership of the Voting
Securities outstanding immediately before such share exchange.
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because twenty-five percent (25%) or more of the then
outstanding Voting Securities is acquired by (i) a trustee or other fiduciary
holding securities under one or more employee benefit plans maintained by
Company or any of its subsidiaries, (ii) any entity that, immediately prior to
such acquisition, is entirely owned (directly or indirectly) by shareowners of
Company in the same proportions as their ownership of stock in Company
immediately prior to such acquisition, (iii) any "Grandfathered Xxxxxxxx Family
shareowner" (as hereinafter defined) or (iv) any Person who has acquired such
Voting Securities directly from any Grandfathered Xxxxxxxx Family
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shareowner but only if such Person has executed an agreement that is approved by
two-thirds of the board of directors of Company and pursuant to which such
Person has agreed that he or she (or they) will not increase his or her (or
their) Beneficial Ownership (directly or indirectly) to thirty percent (30%) or
more of the outstanding Voting Securities (the "Standstill Agreement") and only
for the period during which the Standstill Agreement is effective and fully
honored by such Person. For purposes of this Section, "Grandfathered Xxxxxxxx
Family shareowner" means at any time a "Xxxxxxxx Family shareowner" (as
hereinafter defined) who or which is at the time in question the Beneficial
Owner solely of (v) Voting Securities beneficially owned by such individual on
April 1, 1998, (w) Voting Securities acquired directly from Company, (x) Voting
Securities acquired directly from another Grandfathered Xxxxxxxx Family
shareowner, (y) Voting Securities that are also Beneficially Owned by other
Grandfathered Xxxxxxxx Family shareowners at the time in question, and (z)
Voting Securities acquired after April 1, 1998 other than directly from Company
or from another Grandfathered Xxxxxxxx Family shareowner by any "Xxxxxxxx
Grandchild" (as hereinafter defined); provided that the aggregate amount of
Voting Securities so acquired by each such Xxxxxxxx Grandchild shall not exceed
five percent (5%) of the Voting Securities outstanding at the time of such
acquisition. A "Xxxxxxxx Family shareowner" who or which is at the time in
question the Beneficial Owner of Voting Securities that are not specified in
clauses (v), (w), (x), (y) and (z) of the immediately preceding sentence shall
not be a Grandfathered Xxxxxxxx Family shareowner at the time in question. For
purposes of this Section, "Xxxxxxxx Family shareowners" means individuals who
are descendants of the late Xx. Xxxx X. Xxxxxxxx, Xx. and/or the spouses,
fiduciaries and foundations of such descendants. A "Xxxxxxxx Grandchild" means,
as to each particular grandchild of the late Xx. Xxxx X. Xxxxxxxx, Xx., all of
the following taken collectively: such grandchild, such grandchild's
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descendants and/or the spouses, fiduciaries and foundations of such grandchild
and such grandchild's descendants.
Moreover, notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by Company that,
by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person; provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Voting Securities by Company, and after such
share acquisition by Company, the Subject Person becomes the Beneficial Owner of
any additional Voting Securities that increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.
WHEREFORE, the parties hereto have caused their respective authorized
officers to execute this Agreement as of the date first above written.
WACHOVIA BANK, X.X. XXXXXX FOODS INTERNATIONAL INC.
By:_________________________________ By:_________________________________
Name:_______________________________ Name:_______________________________
Title:______________________________ Title:______________________________
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APPENDIX A
1. Director Compensation Plan
2. Deferred Compensation Plan
3. Supplemental Employees' Retirement Plan.
4. Mid-Career Hire Pension Agreement with Xxxxxx X. Xxxxxxxxx.
5. Special Severance Protection Program
6. Severance Protection Agreement with Xxxxxx X. Xxxxxxxxx
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APPENDIX B
Affiliates
Vlasic Foods, Inc.
Vlasic Farms, Inc.
Vlasic International Brands Inc.
Vlasic International Sales Inc.
Aligar, Inc.
Xxxxxx, Inc.
Vlasic Standards, Inc.
Vlasic Foods Distribution Company
VF Brands, Inc.
