REYNOLDS AMERICAN INC. TRUST AGREEMENT FOR
Exhibit 10.65
XXXXXXXX AMERICAN INC.
TRUST AGREEMENT
FOR
FOR
____________________________
THIS
TRUST AGREEMENT is made as of the ___ day of ____________, ______, by and among
_______________ (the “Executive”), X.X. Xxxxxx Trust Company of Delaware., a trust company
organized under the laws of the State of Delaware (the “Trustee”), as successor to United States
Trust Company, N.A. (“US Trust”), and XXXXXXXX AMERICAN INC., a North Carolina corporation (the
“Company”), as administrative agent for the Executive.
W I T N E S S E T H:
WHEREAS, prior to the closing (the “Closing”) of the transactions contemplated by the Business
Combination Agreement (“BCA”) dated October 27, 2003, between Xxxxx & Xxxxxxxxxx Tobacco
Corporation (“B&W”) and X.X. Xxxxxxxx Tobacco Holdings, Inc., State Street Bank and Trust Company,
as predecessor to US Trust, had entered into a Trust Agreement (the “Prior Trust Agreement”) with
the Executive; and
WHEREAS, the Prior Trust Agreement provided for the establishment and maintenance of two
separate funds: (i) a “SERP Account,” which was established to provide funding for certain
employer-provided non-qualified pension benefits, and (ii) a “Retiree Health Care Account” (the
“RHCA”), which was established to provide a source of premium payment for certain employer-provided
retiree health coverage to the Executive under the Xxxxx & Xxxxxxxxxx Tobacco Corporation Health
Care Plan for Salaried Employees (the “Health Care Plan”); and
WHEREAS, pursuant to the BCA, B&W retained the liability for non-qualified pension benefits
earned through the Closing and all rights under the Prior Trust Agreement to the extent they relate
to the SERP Account thereunder; and
WHEREAS, pursuant to the BCA, the Company has assumed the sponsorship of the Health Care Plan,
and it, or its affiliate, is liable to provide access to retiree health coverage to Executive under
the Health Care Plan (upon Executive’s qualification for such coverage); and
WHEREAS, the Executive previously established with US Trust a trust (the “RHCA Trust”) in
which US Trust, as trustee, received all of the assets held in trust by State Street Bank and Trust
Company in the RHCA under the Prior Trust Agreement; and
WHEREAS, the Executive desires to continue the RHCA in a new trust as a source of funds for
premium payments for retiree coverage under the Health Care Plan; and
WHEREAS, the Executive desires to establish with the Trustee a new trust to which US Trust, as
trustee under the RHCA Trust, will transfer all of the assets held in the RHCA Trust, to be held by
the Trustee hereunder; and
WHEREAS, the Trustee desires to accept such appointment as trustee;
NOW, THEREFORE, in consideration of the premises and mutual and independent promises herein
made, the parties covenant and agree as follows:
ARTICLE 1.
ESTABLISHMENT OF TRUST
ESTABLISHMENT OF TRUST
1.1 The Executive hereby establishes with the Trustee a Trust consisting of such sums of money
and such property acceptable to the Trustee as shall be delivered to the Trustee from the RHCA, as
defined under the Prior Trust Agreement, and the earnings and profits thereon (such amount referred
to herein as the “Fund”). By signing this Trust Agreement, the Executive consents to the transfer
from the trust maintained pursuant to the Prior Trust Agreement of such sums of money and other
property. All such money and property, all investments made therewith and proceeds thereof, less
the payments or other distributions which, at the time of reference, shall have been made by the
Trustee shall be held by the Trustee, IN TRUST, in accordance with the provisions of this trust
agreement (“Agreement”).
1.2 The Trustee shall hold, manage, invest and otherwise administer the Fund pursuant to the
terms of this Agreement. The Trustee shall be responsible only for contributions actually received
by it hereunder and shall have no responsibility for the correctness of the amount thereof. The
Company, in its sole discretion, may direct the Trustee to delegate custody functions to an agent
for the purpose of managing and administering Account assets.
1.3 It is anticipated that the sole contribution to the Fund hereunder will be the assets
delivered by US Trust, as trustee under the Prior Trust Agreement, as contemplated by Section 1.1.
However, the Company may, in its discretion and from time to time, contribute to the Trust such
amount in cash as it determines to be appropriate to provide a source of funds for payments
contemplated by Article 3 of this Agreement.
1.4 The Company shall certify to the Trustee and the Executive at the time of each
contribution to the Trust the amount of such contribution being made.
1.5 The Fund shall be revalued by the Trustee quarterly as of the last business day of each
March, June, September and December, or at such other times as agreed to by the Company and the
Trustee, at current market values, as determined by the Trustee; provided that, for purposes of
stating the value of any insurance investments, the Trustee shall rely on statements from such
insurance investments and shall rely on Company or its designated agent to secure and provide
current statements. The Trustee shall deliver a report of each such valuation, not later than
thirty (30) days after the end of each such valuation to the Company.
1.6 The Trust shall be maintained solely for the purpose of providing a source of payment for
retiree health insurance premiums as contemplated by Article 3 of this Agreement. The Company
shall have no legal or equitable right, title or interest, either actual or
contingent, in or to the Trust, and the Trust shall not constitute the legal or equitable
property of the Company. The Company shall not have the right or ability to transfer, pledge,
convey, hypothecate or grant, either outright or as security, any interest in the Trust or the
Trust Fund; provided, however, that in the event of the commencement of a
bankruptcy case or cases wherein the Company is the debtor, the Trust shall not constitute property
of the debtor’s estate within the meaning of 11 U.S.C. §541, or any similar provision. The Trustee
shall be in sole possession of the Trust and will act solely and exclusively as a Trustee hereunder
and not as an agent for the Company. Accordingly, no creditor of the Company shall have any right
to have or to hold the Trust in satisfaction of any claim or as collateral for any obligation, and
shall not be able to obtain a security interest in the Trust. The Executive hereby appoints the
Trustee as its Trustee to take possession and custody, solely and exclusively on behalf of the
Executive, of the Fund.
ARTICLE 2.
ADMINISTRATIVE PROVISIONS
ADMINISTRATIVE PROVISIONS
2.1 The Company shall act as Administrator of the Trust, as an agent of the Executive;
provided that nothing in the acceptance of such duties, or in the act of making contributions to
the Trust, is intended, nor shall be construed, to be or constitute the establishment or
maintenance of an employee benefit plan or plans as such terms are defined by Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended, or any regulations promulgated
thereunder. Except for the records dealing solely with the Fund and its investments, which shall
be maintained by the Trustee, the Company as Administrator shall: (a) maintain all the Executive’s
records contemplated by this Agreement, the Company’s contributions to the Trust, withdrawals from
the Fund by the Executive (to the extent provided in Section 3.1(b)), and such other records as may
be necessary for determining the amount payable under Article 3 of this Agreement; (b) in
accordance with Article 3, including without limitation Section 3.1(d), direct the Trustee on all
matters pertaining to distributions to or for the benefit of the Executive and/or the eligible
dependents of the Executive, including without limitation participation in the Health Care Plan;
(c) in accordance with this Trust Agreement, including without limitation Section 3.1(d), direct
the Trustee to follow the direction of such agents as may be designated by Company, and (d) to the
extent specified in Article 3 and Article 4, direct the Trustee on all matters pertaining to
investment of the Fund, including without limitation any direction to enter into any split dollar
agreement for insurance; provided that Trustee will be entitled to act upon any instruction or
notice, written or otherwise, which it believes in good faith to be genuine, and is under no duty
to make any investigation or inquiry as to any statement contained in any such instruction or
notice, but may accept the same as true and accurate and from a valid, authentic and authorized
source on behalf of the Company or its designated agent. All such records shall be made available
by Company to Executive or the delegate of the Executive, promptly upon request by the Executive.
The Company as Administrator shall also perform such other duties and responsibilities in
connection with the administration of the Trust as the Company, or the Trustee and the Company
jointly, determine necessary or advisable to achieve the objectives of this Agreement. At any time
when there is an Administrator serving, the Trustee shall be under no duty to inquire into or
monitor, and shall have no liability of any kind with respect to, matters under the authority of
the Administrator or agents appointed by the Administrator. Notwithstanding anything herein to the
contrary, as to matters under the Administrator’s authority or the authority of an agent appointed
by the Administrator, the Trustee shall act only upon the written direction of the Administrator or
such agent, as the case
may be. As provided in Section 3313(b) of Title 12 of the Delaware Code, in no event shall
Trustee hereunder be liable for any matter with respect to which it is directed by the
Administrator or such agent, as the case may be, except in cases of willful misconduct proved by
clear and convincing evidence in the court then having primary jurisdiction over the trust or in
cases in which it acted in a manner that would result in liability under Section 4.1.
2.2 The Company shall have full responsibility for the proper remittance of all withholding
taxes due on contributions made by the Company to the Trust and on amounts paid to the Executive
under Section 3.1(b) to reimburse the Executive in respect of estimated taxes due on such
contributions to the appropriate taxing authority and shall furnish the Executive with the
appropriate tax information form reporting the amounts of such contributions and any withholding
taxes. The Trustee shall have the responsibility for the preparation and filing with the
appropriate taxing authorities of all tax returns required to be filed for the Trust, and shall
furnish the Executive (with a copy to the Company) with the appropriate tax information form or
forms required by taxing authorities.
2.3 After the execution of this Agreement, the Company shall promptly file with the Trustee a
certified list of the names and specimen signatures of the officers or other employees or agents
authorized to act for it. The Company shall promptly notify the Trustee of the addition or
deletion of any person’s name to or from such list, respectively. Until receipt by the Trustee of
notice that any person is no longer authorized so to act, the Trustee may continue to rely on the
authority of the person. All certifications, notices and directions by any such person or persons
to the Trustee shall be in writing signed by such person or persons. The Trustee may rely on any
such certification, notice or direction purporting to have been signed by or on behalf of such
person or persons that the Trustee believes to have been signed thereby. The Trustee may rely on
any certification, notice or direction of the Company that the Trustee believes to have been signed
by a duly authorized officer or agent of the Company. The Trustee shall have no responsibility for
acting or not acting in reliance upon any notification believed by the Trustee to have been so
signed by a duly authorized officer, employee or agent of the Company. The Company shall be
responsible for keeping accurate books and records with respect to the Executive as they pertain to
his rights and interests in the Fund.
ARTICLE 3.
RETIREE HEALTH CARE COVERAGE
RETIREE HEALTH CARE COVERAGE
3.1 The Fund is established for the purpose of providing Executive a source of funds through
which retiree health care coverage (“retiree health coverage”) may be purchased from the Health
Care Plan by Executive, provided Executive is eligible for retiree coverage and benefits under
Section 2.08 of the Health Care Plan (an eligible employee is defined as a “Retired Participant” in
Section 1.60 of the Health Care Plan, as amended through July 29, 2004). The Trustee shall be
under no independent duty to determine, or confirm, the eligibility of the Executive to receive
retiree coverage and benefits under the Health Care Plan, but instead, shall be directed in writing
by the Company as to the eligibility of the Executive thereunder, and the Trustee may rely on such
directions without further inquiry. The Fund shall be managed and administered as follows:
(a) An amount anticipated to be sufficient to pay the actuarially projected cost of
retiree health coverage has previously been deposited to the Fund by U.S. Trust as trustee
under the RHCA Trust, and the amounts so deposited shall be invested in such manner as the
Company, as agent for the Executive, reasonably determines will satisfy the
actuarially-projected cost of such retiree health coverage, including without limitation,
the purchase of insurance on the life of the Executive that provides an inside buildup to
the owner.
(b) Although it is anticipated that there will be no further contributions to the Fund,
pursuant to Section 1.3 the Company may make additional contributions to the Fund. To the
extent the Company contributes any additional amount to the Fund, the Executive may elect,
for a period of thirty (30) days after deposit, to withdraw such contribution from the Fund
for any use or purpose; provided that after such thirty (30) day period expires, such
contribution (inclusive of any earnings thereon) shall in all events be subject to the terms
and conditions of this Section 3.1, and may not be withdrawn from the Fund by the Executive
or used for any purpose other than the purchase of retiree health coverage for the Executive
and eligible dependents, as provided in subsection (c) below (or, if applicable, Section
3.2). In the event any such funds are withdrawn by Executive during such thirty (30) day
period, no further or additional contributions to the Fund shall or may be made by the
Company. The Company shall in all events reimburse the Executive for the estimated income
and other taxes due on each such contribution made by the Company, and on any taxable
earnings on assets held in the Fund.
(c) The Trustee shall pay, from the current and accumulated principal and interest of
the Fund, the Normal Cost (as defined in Health Care Plan Section 1.45) of retiree health
coverage applicable to the Executive and eligible dependents under the Health Care Plan at
the time of retirement (except for the percentage share of the Normal Cost the Executive is
obligated by the Health Care Plan to pay for such coverage if applicable), and as adjusted
from year to year thereafter. The Trustee shall be under no independent duty to determine,
or confirm, the Normal Cost of retiree health coverage applicable to the Executive and
eligible dependents under the Health Care Plan, but instead, shall be directed in writing by
the Company as to the amount of such Normal Cost, and the Trustee may rely on such
directions without further inquiry. Such payment shall be made to the Health Care Plan
through a deposit to the trustee (or to any successor thereto, or if none to the Company) of
the “Xxxxx & Xxxxxxxxxx Tobacco Corporation Trust Agreement for Noncollectively Bargained
Postretirement Healthcare Benefits” (the “Salaried VEBA”) or its designated agent (or to any
successor of the Salaried VEBA, or if none to the Company), on a periodic basis not less
often than annually, except as otherwise agreed by the Health Care Plan. In the event
alternative coverage is provided pursuant to Section 3.2 below, the Trustee shall pay the
premium cost thereof as reasonably required by the provider of the coverage, to the extent
directed in writing by the Company, or in the event an agent is appointed pursuant to
subsection 3.1(d) below, the agent, as to payee, form and amount of such premium, and the
Trustee may rely on such directions without further inquiry, provided that the Company and
its designated agent shall act at the written direction of the Executive (or eligible
dependent, if applicable).
(d) The Company, in its sole discretion, may appoint an agent for the purpose of
managing and administering the Fund, including without limitation the administration of any
contracts of insurance held in the Fund. The agent appointed by the Company shall have
power and authority to direct the Trustee with respect to the management and maintenance of
any such insurance contracts, the payment of the premium cost of retiree health coverage
through withdrawals or loans from such insurance contracts, and to engage in any other act
necessary or advisable to fulfil its duties hereunder, and the Trustee may rely on such
directions without further inquiry.
(e) Upon the written notification by the Company of the death of the Executive, the
Trustee shall collect any death benefit owing to the Trust from any insurance contract
purchased pursuant to subsection (a) above, and shall hold, manage, invest and reinvest the
proceeds (together of any other funds then held in the Fund), and make distributions
therefrom, as directed by the Administrator, for the purposes and upon the terms and
conditions set forth in subsection (c) above, or Section 3.2 below, for as long as there
remains living an eligible dependent of the Executive. At such time as there shall be no
living Executive or eligible dependents of the Executive eligible for benefits under the
Health Care Plan or an alternative plan under Section 3.2, the balance of the Fund
(inclusive of any such death benefits and other funds then held in the Fund) shall be paid
to the trustee of the Salaried VEBA, or to any successor thereto, or if none to the Company.
(f) In the event Executive terminates employment prior to becoming eligible for retiree
health coverage as a Retired Participant (as defined by the Health Care Plan), no further
deposits shall be made to the Fund, and the insurance contract shall be terminated effective
the date of Executive’s employment termination. Upon the written notification by the
Company that the Executive terminated employment prior to becoming eligible for retiree
health coverage as a Retired Participant, the proceeds of such terminated insurance contract
(together with any other funds then held in the Fund) shall thereupon be paid to the trustee
of the Salaried VEBA, or to any successor thereto, or if none to the Company.
3.2 In the event health care coverage under the Health Care Plan is not available to the
Executive and eligible dependents for any reason, or if such coverage is amended or modified to
decrease available coverage, the Trustee is authorized to purchase comparable health care coverage
from another health care provider, as determined and selected by the Administrator or such agent
appointed by the Administrator, provided that the Company and its designated agent shall act at the
written direction of the Executive (or eligible dependent, if applicable). The Company, or in the
event an agent is appointed pursuant to subsection 3.1(d) above, the agent, shall have power and
authority, at the written direction of the Executive (or eligible dependent, if applicable), to
obtain such other coverage, enter into any agreements necessary to secure coverage and to direct
the Trustee with respect to the payment of required premiums or cost of coverage, and the Trustee
may rely on such directions without further inquiry.
ARTICLE 4.
INVESTMENT OF FUND
INVESTMENT OF FUND
4.1 The Trustee shall not be liable in discharging its duties hereunder, including without
limitation its duty to invest and reinvest the Fund, if it acts in good faith and in accordance
with the terms of this Agreement, the directions of the Company or any agent authorized to act for
it, or any investment manager other than the Trustee.
4.2 The Trustee shall have no discretion or authority with respect to the investment of Trust
assets, but shall act solely as a directed Trustee, and shall invest and reinvest the principal and
income of the Trust and keep the Trust invested in such investments as directed by the Company or
one or more investment managers appointed by the Company. The Trustee shall have no duty to
question any action or direction or failure to give directions of the Company or any duly appointed
investment manager as to the investment, reinvestment, management, disposition or distribution of
Trust assets.
4.3 The Company may select an investment manager with respect to the investment, reinvestment,
management, disposition or distribution of Trust assets. The Company shall notify the Trustee, in
writing, of the appointment of any investment manager.
4.4 To the extent necessary to carry out the directions of the Company or any duly appointed
investment manager, the Trustee is authorized and empowered, but not by way of limitation, with the
following powers, rights and duties:
(a) To receive and hold all contributions made to it by the Company;
(b) To invest and reinvest all or any portion of the Fund collectively through the
medium of any common, collective, commingled trust or mutual fund that may be established,
maintained or advised by the Trustee or any affiliate thereof (including any such investment
company or investment trust to which the Trustee or an affiliate provides services and/or
from which it receives fees as investment advisor, custodian, transfer agent or sub-transfer
agent, registrar, administrator or sub-administrator, or in any other capacity), subject to
the instrument or instruments establishing such trust fund or funds and with the terms of
such instrument or instruments, as from time to time amended, being incorporated into this
Agreement to the extent of the equitable share of the Fund in any such common, collective,
commingled trust or mutual fund; and, in addition to the investment powers conferred above,
the Trustee is authorized (but not directed) to acquire and retain investments not regarded
as traditional for trusts, including investments that would be forbidden or would be
regarded as imprudent, improper or unlawful by the “prudent person” rule, “prudent investor”
rule, Section 3302 of Title 12 of the Delaware Code, any rule or law concerning the duty of
loyalty, any rule or law limiting, proscribing, or voiding or making voidable any interested
party or self-dealing transaction, or any other rule or law which restricts a fiduciary’s
capacity to invest; and, the Trustee is authorized (but not directed) to acquire property
from, transfer property to, obtain services from, provide services to, and otherwise enter
into contracts, understandings, arrangements, and other dealings, of any kind or nature,
with any person or entity (each such person or entity hereinafter referred to as a “Third
Party”), whether
or not the Third Party is in any manner related to, or affiliated with, the Trustee or
any other person or entity related to, or affiliated with, the Trustee and without regard to
whether the Trustee, acting in its corporate or personal capacity or in any other capacity,
or any person related to, or affiliated with, the Trustee has other contracts,
understandings, arrangements or dealings, whether or not for remuneration, with the Third
Party; and, in making investments, the Trustee may disregard any or all of the following
factors: (1) whether a particular investment, or the trust investments collectively, will
produce a reasonable rate of return or result in the preservation of principal; (2) whether
the acquisition or retention of a particular investment or the trust investments
collectively are consistent with any duty of impartiality as to the different beneficiaries;
(3) whether the acquisition or retention of a particular investment or any aspect of the
administration of the investment violates any duty of loyalty or rule against self-dealing;
(4) whether the trust is diversified; and (5) whether any or all of the trust investments
would traditionally be classified as too risky or speculative for trusts (the entire trust
may be so invested); provided further that, the Executive’s purpose in granting the
foregoing authority is to modify the “prudent person” rule, “prudent investor” rule, the
application of Section 3302 of Title 12 of the Delaware Code, the duty of loyalty, the rule
against self-dealing, or any other rule or law which restricts a fiduciary’s ability to
invest insofar as any such rule or law would prohibit an investment or investments because
of one or more factors listed above, or any other factor relating to the nature of the
investment itself; it being the Executive’s belief that it is in the best interests of the
beneficiaries of the trusts created hereunder to give the Trustee broad discretion in
managing the assets of the trusts created hereunder; provided however that, notwithstanding
the foregoing, the Trustee shall exercise all of the Trustee’s powers and authority under
this Agreement solely in a fiduciary capacity and shall only be liable for any loss incurred
by any trust hereunder caused by the Trustee’s own willful misconduct;
(c) to invest and reinvest or otherwise deposit all or any portion of the Fund assets
in savings accounts, time deposit accounts, certificates of deposit, money market funds, or
other evidences of deposit issued by the Trustee and/or any other national bank, savings and
loan institution, state member bank, state non-member bank, or other depository institution,
including any such entity which now or in the future is an affiliate of the Trustee;
(d) to retain in cash or cash equivalents so much of the Fund assets as may
reasonably be required for liquidity needs of the Plan(s) and to deposit any such cash
held in the Trust with any bank or savings institution, including its own banking
department, without liability for interest on such cash deposits;
(e) To participate in and use a book-entry system for the deposit and transfer of
securities;
(f) To sell or exchange any property held by it at public or private sale, for cash or
on credit, to grant and exercise options for the purchase or exchange thereof, to exercise
all conversion or subscription rights pertaining to any such property and to enter into any
covenant or agreement to purchase any property in the future;
(g) To participate in any plan of reorganization, consolidation, merger, combination,
liquidation or other similar plan relating to property held by it and to consent to or
oppose any such plan or any action thereunder or any contract, lease, mortgage, purchase,
sale or other action by any person;
(h) To deposit any property held by it with any protective, reorganization or similar
committee, to delegate discretionary power thereto, and to pay part of the expenses and
compensation thereof and any assessments levied with respect to any such property so
deposited;
(i) To extend the time of payment of any obligation held by it;
(j) To hold uninvested any moneys received by it, without liability for interest
thereon, until such moneys shall be invested, reinvested or disbursed;
(k) To exercise all voting or other rights with respect to any property held by it and
to grant proxies, discretionary or otherwise;
(l) For the purposes of the Trust, to borrow money from others, including the Trustee,
to issue its promissory note or notes therefor, and to secure the repayment thereof by
pledging any property held by it;
(m) To furnish the Company and the Executive with such information as may be needed for
tax or other purposes;
(n) To employ suitable agents and counsel, who may be counsel to the Company or the
Trustee, and to pay their reasonable expenses and compensation from the Fund to the extent
not paid by the Company and to the extent the trust contains any cash or cash equivalents;
(o) To cause any property held by it to be registered and held in the name of one or
more nominees, with or without the addition of words indicating that such securities are
held in a fiduciary capacity, and to hold securities in bearer form;
(p) To settle, compromise or submit to arbitration any claims, debts or damages due or
owing to or from the Trust, respectively, to commence or defend suits or legal proceedings
to protect any interest of the Trust, and to represent the Trust in all suits or legal
proceedings in any court or before any other body or tribunal; provided, however, that the
Trustee shall not be required to take any such action unless it shall have been indemnified
by the Company to its reasonable satisfaction against liability or expenses it might incur
therefrom;
(q) To organize under the laws of any state a corporation or trust for the purpose of
acquiring and holding title to any property which it is authorized to acquire hereunder and
to exercise with respect thereto any or all of the powers set forth herein;
(r) To manage, administer, operate, lease for any number of years, develop, improve,
repair, alter, demolish, mortgage, pledge, grant options with respect to, or
otherwise deal with any real property or interest therein at any time held by it, and
to hold any such real property in its own name or in the name of a nominee, with or without
the addition of words indicating that such property is held in a fiduciary capacity, all
upon such terms and conditions as may be deemed advisable by the Company or its agent;
(s) To make, execute and deliver, as Trustee, any and all deeds, leases, mortgages,
conveyances, waivers, releases, or other instruments in writing necessary or desirable for
the accomplishment of any of the foregoing powers;
(t) To enter into and hold an agreement of insurance on the life of the Executive,
including without limitation an agreement to split ownership with another person or entity
by endorsement, collateral assignment, division of ownership or otherwise, and to enter into
and execute any documentation necessary to implement such agreement or agreements;
(u) To enter into transactions with, and to retain the services of, any entity
affiliated with the Trustee, upon such terms and conditions as the Trustee deems advisable,
including but not limited to transactions or services in which the Trustee or its affiliated
entity (i) is a broker or dealer retained to execute security transactions on behalf of the
trust estate or any trust; (ii) purchases assets from or sells assets to the trust estate or
any trust; (iii) lends money to the trust estate or any trust; (iv) engages in any other
transactions (whether as an agent, as a principal, as a counterparty or in any other
capacity) with, or renders any other services to, the trust estate or any trust; and, in
such instances, the affiliated entity shall be entitled to receive fees or other
compensation from the trust estate or any trust without any reduction of the fees which the
Trustee shall be otherwise entitled to receive from the trust estate or any trust; and
(v) Generally, to do all acts, whether or not expressly authorized, that the Trustee
may deem necessary or desirable for the protection of the Fund.
4.5 If at any time there is no person authorized to act under this Agreement on behalf of the
Company, the Vice President of Human Resources, or the person occupying a similar position with the
Company at the time, shall have the authority to act hereunder.
ARTICLE 5.
PAYMENT OF TAXES AND EXPENSES
PAYMENT OF TAXES AND EXPENSES
5.1 The Executive, or in the event of the Executive’s death, the Executive’s personal
representative, shall be liable for, and responsible for, the payment of any federal, state or
local taxes on Company deposits to the Fund, subject to the Company’s obligation under Section
3.1(b) to reimburse the Executive in respect of the estimated taxes due on such deposits. The
Executive shall also be liable for, and responsible for, the payment of any federal, state or local
taxes on Fund earnings, subject to the Company’s obligation under Section 3.1(b) to reimburse the
Executive in respect of the estimated taxes due on such earnings.
5.2 Except as otherwise provided herein, the Company shall pay the Trustee its reasonable
expenses for the management and administration of the Fund, including without limitation advances
for or prompt reimbursement of reasonable expenses of counsel and other
agents employed by the Trustee, and reasonable compensation for its services as Trustee
hereunder, the amount of which shall be agreed upon from time to time by the Company and the
Trustee in writing; provided, however, that if the Trustee forwards an amended fee schedule
to the Company requesting its agreement thereto and the Company fails to object thereto within
thirty (30) days of its receipt, the amended fee schedule shall be deemed to be agreed upon by the
Company and the Trustee. If the Company does not pay the Trustee’s fees, costs, expenses and
liabilities within sixty (60) days of being billed, the Trustee may obtain payment from any cash or
cash equivalents held in the Trust, and is hereby granted a lien on the cash or cash equivalent
assets of the Trust for such payment (notwithstanding the foregoing, the Trustee shall not be
entitled to place a lien on any insurance policies held in the Trust or receive payment from
non-cash or non-cash equivalents held in the Trust). Pursuant to the terms of this Agreement
permitting self-dealing, to the extent the trust retains an affiliate of Trustee to manage any
assets, any investment management fees received by such affiliate will be in addition to the
Trustee’s annual trustee fee and, similarly, expense ratios within any money market funds or other
mutual funds held in the Trust at any time shall be additional compensation to the Trustee’s
affiliate that is not included in the annual trustee fee; provided further that any affiliated
custodian shall be entitled, as an additional part of its compensation under this Agreement, to the
earnings derived from use of funds (“float”) that may be held (i) as uninvested trust cash or (ii)
in demand deposit or other non-interest bearing accounts established for the payment of benefits or
disbursements or that are otherwise maintained for similar purposes in administering the Trust
Fund. Float is earned at the federal funds rate. The float period for disbursements commences one
to five business days after a check for the payment of such premiums or Plan disbursements is
mailed and ends on the date the check is presented to the Trustee for payment.
ARTICLE 6.
TRUST RECORDS
TRUST RECORDS
6.1 The Trustee shall maintain records with respect to the Fund that show all its receipts and
disbursements hereunder. Upon request by the Company or its representatives, the Trustee will
provided an accounting audited by an independent certified public accountant engaged by the
Trustee; provided that the Company shall approve and pay the costs of such accountant; provided
further that, the Trustee shall be entitled to additional compensation from the Company in respect
of audits or auditors’ requests which the Trustee determines to exceed the ordinary course of the
usual scope of such examinations of its records.
6.2 Within sixty (60) days after the close of each fiscal year of the Company (or, in the
Trustee’s discretion, at more frequent intervals), or of any termination of the duties of the
Trustee hereunder, whether by removal, resignation or termination of the Trust, the Trustee shall
prepare and deliver to the Company a statement of transactions reflecting its acts and transactions
as Trustee during such fiscal year, portion thereof or during such period from the close of the
last fiscal year or last statement period to the termination of the Trustee’s duties, respectively,
including a statement of the then current value of the Fund. Unless protested by written notice to
the Trustee within sixty (60) days of receipt thereof by the Company, on behalf Executive , any
such statement shall be deemed an account statement accepted and approved by the Company (except as
to any item, matter or thing that (i) is attributable to the Trustee’s fraud, criminal violation,
or willful misconduct, or (ii) could not have been discovered by or from reasonable follow up to a
reasonably diligent review of the accounting), and the Trustee shall be
relieved and discharged, as if such account had been settled and allowed by a judgment or
decree of a court of competent jurisdiction.
6.3 The Trustee shall have the right to apply at any time to a court of competent jurisdiction
for judicial settlement of any account of the Trustee or for the determination of any question of
construction or for instructions, even though that accounting covers a period for which a statement
has been provided to a beneficiary and no objection has been received. In any such action or
proceeding it shall be necessary to join as parties only the Trustee, the Company and the Executive
(although the Trustee may also join such other parties as it may deem appropriate), and any
judgment or decree entered therein shall be conclusive. All costs of a judicial proceeding,
including attorney fees and any cost of reformatting information to satisfy the custom and practice
of the reviewing court, shall be borne by the Trust Fund; provided that no insurance asset shall be
liquidated, invaded, attached or otherwise encumbered to satisfy or secure such payment obligation.
ARTICLE 7.
RESIGNATION/REMOVAL OF TRUSTEE
AND APPOINTMENT OF SUCCESSOR TRUSTEE
RESIGNATION/REMOVAL OF TRUSTEE
AND APPOINTMENT OF SUCCESSOR TRUSTEE
7.1 The Trustee may resign at any time by delivering written notice thereof to the Company and
the Executive; provided, however, that no such resignation shall take effect until the earlier of
(i) sixty (60) days from the date of delivery of such notice to the Company and the Executive or
(ii) the appointment of a successor trustee.
7.2 The Trustee may be removed at any time by the Company with the concurrence of the
Executive, upon delivery to the Trustee of a certified letter of direction from the Company or the
Executive with sixty (60) days’ written notice to the Trustee of (i) such removal and (ii) the
appointment of a successor trustee, unless such notice period is waived in whole or in part by the
Trustee.
7.3 Upon the resignation or removal of the Trustee, a successor trustee shall be appointed by
the Company, with the concurrence of the Executive. Such successor trustee shall be a bank or
trust company established under the laws of the United States, or a state within the United States,
or in any other jurisdiction. Such appointment shall take effect upon the delivery to the Trustee
and the Executive of (i) a written appointment of such successor trustee, duly executed, by the
Company and (ii) a written acceptance by such successor trustee, duly executed. Any successor
trustee shall have all the rights, powers and duties granted the Trustee hereunder. The successor
trustee shall be entitled to rely on the books and accounts delivered to it by the prior trustee as
provided in Section 6.2 hereof, and shall be held harmless by the Company and the Executive with
respect to any errors or misstatements therein.
7.4 If, within sixty (60) days of the delivery of the Trustee’s written notice of resignation,
a successor trustee shall not have been appointed, the Trustee shall apply to any court of
competent jurisdiction for the appointment of a successor trustee. All expenses of the Trustee in
connection with such proceeding shall be an obligation of the Company (notwithstanding the
foregoing, to the extent the Company fails to pay these expenses, these
expenses may be allowed as administrative expenses of the Trust, provided the Trust contains
any cash or cash equivalents).
7.5 Upon the resignation or removal of the Trustee and the appointment of a successor trustee,
and after the acceptance and approval of its accounts, the Trustee shall transfer and deliver the
Fund to such successor trustee. Under no circumstances shall the Trustee transfer or deliver the
Fund to any successor trustee which is not a bank or trust company. In the event that the Fund is
invested in any common, collective, commingled trust or mutual fund established, maintained or
advised by the Trustee or any affiliate thereof, the Trustee may reduce such investment to cash
within a reasonably practicable period prior to delivery to a successor trustee.
ARTICLE 8.
TRUST TERMINATION
TRUST TERMINATION
8.1 The Trust established pursuant to this Agreement shall continue for as long as there
remain assets in the Fund, and the Company shall continue to pay the expenses and compensation of
the Trustee as they relate to the Fund. Upon termination of the trust, the balance of the trust
estate, if any, shall be paid as directed in Section 3.1(e) or (f), as applicable.
8.2 Upon termination of the Trust in accordance with this Article 8, the Trustee shall, after
the acceptance and approval of its account, be relieved and discharged. The powers of the Trustee,
including the right to receive compensation for services and payment of expenses, as provided in
Section 5.2, shall continue as long as any part of the Fund remains in its possession.
ARTICLE 9.
TRUST AMENDMENT
TRUST AMENDMENT
9.1 This Agreement may be amended, in whole or in part, at any time and from time to time, by
the mutual agreement and written consent of the parties, which consent shall not unreasonably be
withheld.
ARTICLE 10.
INDEMNIFICATION
INDEMNIFICATION
10.1 To the maximum extent permitted by law, the Trustee shall be indemnified and held
harmless by the Company from and against any and all liability to which the Trustee may be
subjected as a result of this Agreement or its performance of services hereunder, including, but
not limited to, any Liability arising (i) from any action or failure to act resulting from
compliance with proper instructions of the Company or any other person authorized by the Company to
give directions to the Trustee, or (ii) by reason of any breach of any statutory or other duty owed
to the Health Care Plan or Health Care Plan participants by the Company, or any of its officers,
directors, employees, or agents, provided that the Trustee may not also be considered liable for
that other person’s breach under the provisions of applicable law. Furthermore, under no
circumstances shall the Trustee incur liability to any person for any indirect, consequential or
special damages (including, without limitation, lost profits) of any
form, whether or not foreseeable and regardless of the form of the action in which such a
claim may be brought, with respect to the Trust or its role as the Trustee.
10.2 To the extent the Trustee is not indemnified under Section 10.1, the Trustee, its
affiliates, and their officers, agents and employees may bring action against the Company to
contribute to the satisfaction of any Liability to the extent that the Liability is caused by the
culpable conduct of the Company, or any of its affiliates or agents; provided that the amount of
such contribution shall be based on comparative fault of the Company and its affiliates and agents
on the one hand, and the Trustee, its affiliates and their officers, agents and employees on the
other hand causing such Liability.
10.3 The foregoing rights of indemnification and contribution shall not supersede any common
law or equitable rights or remedies which may be available.
10.4 For purposes of this Agreement, “Liability” means any liability, loss, cost, damage,
penalty, fine, obligation or expense of any kind whatsoever (including, without limitation,
reasonable attorneys’, accountants’, consultants’ or experts’ fees and disbursements).
10.5 The provisions of this Article 10 shall survive the termination of this Agreement.
ARTICLE 11.
GENERAL PROVISIONS
GENERAL PROVISIONS
11.1 This Agreement shall be construed and interpreted under, and the Trust hereby created
shall be governed by, the laws of the State of Delaware without regard to its choice of law rules,
insofar as such laws do not contravene any applicable federal laws, rules or regulations.
11.2 Neither the gender nor the number (singular or plural) of any word shall be construed to
exclude another gender or number when a different gender or number would be appropriate.
11.3 Should this Agreement be held invalid or unenforceable (in whole or in part) with respect
to any term or condition hereof, it shall remain fully valid and enforceable as to all other terms
and conditions.
11.4 This Agreement shall be binding upon and inure to the benefit of the Executive, his
estate, personal representative, beneficiary, heirs and assigns. This Agreement also shall be
binding upon and inure to the benefit of any successor to the Company (or its business) which
assumes liability for the Health Care Plan as the result of merger, consolidation, reorganization,
transfer of assets or otherwise and any subsequent successor thereto. In the event of any such
merger, consolidation, reorganization, transfer of assets or other similar transaction, the
successor to the Company or its business or any subsequent successor thereto shall promptly notify
the Trustee in writing of its successorship. In no event shall any such transaction described
herein suspend or delay the rights of the Executive to receive benefits hereunder.
11.5 This Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all of which shall together constitute only one Agreement.
11.6 If circumstances beyond the Trustee’s reasonable control, including, but not limited to,
natural disasters, acts of war or terrorism, civil or military disturbances, work stoppages, power
outages or other interruptions, loss or malfunctions of utilities or communications services,
computer viruses, acts of civil or military authority or other governmental action, suspension or
restriction of trading on or the closure of any securities markets, or other similar acts, events
or conditions, make it impossible for the Trustee to fully perform its duties under this Agreement,
then the principles of force majeure will apply and the obligations of the Trustee will be
temporarily suspended during the force majeure period to the extent performance is reasonably
affected thereby and the Trustee shall not be responsible or liable for any failure or delay in the
performance of its obligations.
11.7 The Company, the Executive and the Trustee waive any right to have a jury participate in
resolving any controversy, claim, misunderstanding or dispute, whether sounding in contract, tort
or otherwise, between or among them arising out of, connected with, related to or incidental to
this Agreement or any breach hereof. Instead, the parties hereby agree that any controversies,
claims, misunderstandings or disputes to be resolved in court will be resolved in a bench trial
without a jury. Notwithstanding anything herein to the contrary, either party may proceed to a
court of competent jurisdiction to obtain injunctive relief at any time.
11.8 Trustee Acts In Fiduciary Capacity.11.8 Every act done, power exercised or obligation
assumed by the Trustee pursuant to the provisions of this Agreement shall be held to be done,
exercised or assumed, as the case may be, by the Trustee acting in a fiduciary capacity and not
otherwise.
11.9 All notices and other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when actually delivered to the respective addresses set
forth below:
Company:
|
XXXXXXXX AMERICAN INC. X.X. Xxx 0000 000 Xxxxx Xxxx Xxxxxx Xxxxxxx-Xxxxx, XX 00000-0000 |
|
Trustee:
|
X.X. XXXXXX TRUST COMPANY OF DELAWARE Xxxxxxx X. Xxxxxxx Vice President 000 Xxxxxxx Xxxxxxxxxx Xxxx Xxxxxx, XX 00000-0000 |
Executive:
|
_____________________________ _____________________________ _____________________________ |
or at such other address as such person may specify in writing by notice as set forth above to the
other persons listed above.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to be duly executed as
of the date first above written.
| [EXECUTIVE’S NAME] | ||||
| XXXXXXXX AMERICAN INC. | ||||
| By: | ||||
| On Behalf of the RAI Employee Benefits Committee | ||||
| X.X. XXXXXX TRUST COMPANY OF DELAWARE | ||||
Attest: |
||||
| By: | ||||
Secretary/Asst. Secretary
|
Authorized Officer | |||
