Exhibit 10.7.b
FMC TECHNOLOGIES, INC
EQUIVALENT RETIREMENT PLAN
GRANTOR TRUST AGREEMENT
This Grantor Trust Agreement (the "Trust Agreement") is made this 31st day of
July 2001 by and between FMC TECHNOLOGIES, INC. ("the Company") and WACHOVIA
BANK, N.A. ("the Trustee").
Recitals
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(a) WHEREAS, the Company has adopted the FMC Technologies, Inc. Salaried
Employees Equivalent Retirement Plan (the "Arrangement");
(b) WHEREAS, the Company has incurred or expects to incur liability under
the terms of such Arrangement with respect to the individuals
participating in such Arrangement (the "Participants and
Beneficiaries");
(c) WHEREAS, the Company has previously established a grantor trust
effective May 1, 2001 (the "Prior Trust") for such Arrangement and
wishes by this Trust (the "Trust") to amend and restate such Prior
Trust and shall contribute to the Trust assets that shall be held
therein, subject to the claims of the Company's creditors in the event
of the Company's Insolvency, and subject to the claims of a
Subsidiary's creditors in the event of the Subsidiary's Insolvency to
the extent the Trust assets were contributed on behalf of such
Subsidiary's employees, until paid to Participants and their
Beneficiaries in such manner and at such times as specified in the
Arrangement and in this Trust Agreement;
(d) WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of
the Arrangement as unfunded plans maintained for the purpose of
providing executive benefits for a select group of management or highly
compensated employees for purposes of Title I of the Employee
Retirement Income Security Act of 1974; and
(e) WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide itself with a source of funds (the "Fund") to
assist it in satisfying its liabilities under the Arrangement.
NOW, THEREFORE, the parties do hereby establish the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
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Section 1. Establishment of The Trust
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(a) The Trust is intended to be a Grantor Trust, of which the Company is
the Grantor, within the meaning of subpart E, part I, subchapter J,
chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended,
and shall be construed accordingly.
(b) The Company shall be considered a Grantor for the purposes of the Trust.
(c) The Trust hereby established is revocable by the Company; it shall
become irrevocable upon a Potential Change in Control or Change in
Control, as defined herein (except as may otherwise be provided by this
Trust Agreement); provided however, in the event that no Change in
Control occurs within one year of a Potential Change in Control, this
Trust shall again become revocable until a Potential Change in Control
or Change in Control should occur.
(d) The Company hereby deposits with the Trustee in the Trust one-thousand
dollars and zero cents ($1,000.00) which shall become the principal of
the Trust to be held, administered and disposed of by the Trustee as
provided in this Trust Agreement.
(e) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of the Company and shall be used
exclusively for the uses and purposes of Participants and general
creditors as herein set forth. 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 Arrangement
and this Trust Agreement shall be unsecured contractual rights of
Participants and their Beneficiaries against the Company. Any assets
held by the Trust will be subject to the claims of the general
creditors of the Company under federal and state law in the event the
Company is Insolvent, and subject to a Subsidiary's creditors in the
event of the Subsidiary's Insolvency to the extent the Trust assets
were contributed to the Trust on behalf of the Subsidiary's employees.
(f) The Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property acceptable to
the Trustee in the Trust to augment the principal to be held,
administered and disposed of by the Trustee as provided in this Trust
Agreement. Prior to a Change in Control, neither the Trustee nor any
Participant or Beneficiary shall have any right to compel additional
deposits.(g) As soon as practicable after the Company has knowledge
that a Change in Control is imminent, but no later than the last
business day immediately preceding the date of the Change in Control,
the Company shall make a contribution to the Trust in an amount equal
to the Required Funding Amount as defined by this Trust less any assets
held by the Trust. At least each six months after the occurrence of a
Change in Control, the Company shall make a contribution in the amount,
if any, by which the Required Funding Amount exceeds the value of
assets held by the Trust.
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Section 2. Payments to Participants and Their Beneficiaries
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(a) Prior to a Change in Control, the Trustee shall make distributions from
the Trust to Participants and Beneficiaries at the direction of the
Company. Prior to a Change in Control, the entitlement of a Participant
or his or her Beneficiaries to benefits under the Arrangement shall be
determined as provided by the Arrangement, and any claim for such
benefits shall be considered and reviewed under the procedures set out
in the Arrangement.
(b) The Company may make payment of benefits directly to Participants or
their Beneficiaries as they become due under the terms of the
Arrangement. The Company shall notify the Trustee of its decision to
make payment of benefits directly prior to the time amounts are payable
to Participants or their Beneficiaries. In addition, if the principal
of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Arrangement,
the Company shall make the balance of each such payment as it falls due
in accordance with the Arrangement. The Trustee shall notify the
Company where principal and earnings are not sufficient. Nothing in
this Agreement shall relieve the Company of its liabilities to pay
benefits due under the Arrangement except to the extent such
liabilities are met by application of assets of the Trust.
(c) After a Potential Change in Control and before a Change in Control, the
Company shall deliver to the Trustee a schedule of benefits due under
the Arrangement. After a Change in Control, the Company shall continue
to make the determination of benefits due to Participants or their
Beneficiaries and shall provide the Trustee with an updated schedule of
benefits due; provided however, a Participant or their Beneficiaries
may make application to the Trustee for an independent decision as to
the amount or form of their benefits due under the Arrangement. The
Trustee shall notify the Company of any such appeal and the Company
shall be permitted to provide the Trustee with any information the
Company wishes the Trustee to consider in making a determination
pursuant to this Section. In making any determination required or
permitted to be made by the Trustee under this Section, the Trustee
shall, in each such case, reach its own independent determination, in
its absolute and sole discretion, as to the Participant's or
Beneficiary's entitlement to a payment hereunder. In making its
determination, the Trustee may consult with and make such inquiries of
such persons, including the Participant or Beneficiary, the Company,
legal counsel, actuaries or other persons, as the Trustee may
reasonably deem necessary. Any reasonable costs incurred by the Trustee
in arriving at its determination shall be reimbursed by the Company
and, to the extent not paid by the Company within a reasonable time,
shall be charged to the Trust. The Company waives any right to contest
any amount paid over by the Trustee hereunder pursuant to a good faith
determination made by the Trustee notwithstanding any claim by or on
behalf of the Company (absent a manifest abuse of discretion by the
Trustee) that such payments should not be made.
(d) In the event any Participant or his or her Beneficiary is determined to
be subject to federal income tax on any amount to the credit of his or
her account under any Arrangement prior to the time of payment
hereunder, whether or not due to the establishment of or contributions
to this Trust, a portion of such taxable amount equal to
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the federal, state and local taxes (excluding any interest or
penalties) owed on such taxable amount, shall be distributed by the
Trustee as soon thereafter as practicable to such Participant or
Beneficiary. For these purposes, a Participant or Beneficiary shall be
deemed to pay state and local taxes at the highest marginal rate of
taxation in the state in which the Participant resides or is employed
(or both) where a tax is imposed and federal income taxes at the
highest marginal rate of taxation, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes. Any distributions from the Fund to a Participant
or Beneficiary under this Section 2(d) shall be applied to reduce the
Company liabilities to such Participant and/or Beneficiary under the
applicable Arrangement with such reductions to be made on a pro-rata
basis over the term of benefit payments under the Arrangement
(e) The Trustee agrees that it will not itself institute any action at law
or at equity, whether in the nature of an accounting, interpleading
action, request for a declaratory judgment or otherwise, requesting a
court or administrative or quasi-judicial body to make the
determination required to be made by the Trustee under this Section 2
in the place and stead of the Trustee. The Trustee may (and, if
necessary or appropriate, shall) institute an action to collect a
contribution due the Trust following a Change in Control or in the
event that the Trust should ever experience a short-fall in the amount
of assets necessary to make payments pursuant to the terms of the
Arrangement.
Section 3. Trustee Responsibility Regarding Payments
To The Trust Beneficiary When The Company Is Insolvent
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(a) The Trustee shall cease payment of benefits to Participants and their
Beneficiaries if the Company is Insolvent or a Subsidiary is Insolvent
to the extent the Trust assets were contributed on behalf of the
Company's or a Subsidiary's employees. The Company and/or a Subsidiary
shall be considered "Insolvent" for purposes of this Trust Agreement if
(i) the Company and/or a Subsidiary is unable to pay its debts as they
become due, or (ii) the Company and/or a Subsidiary 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, the principal and
income of the Trust shall be subject to claims of general creditors of
the Company and/or a Subsidiary under federal and state law as set
forth below.
(1) The Board of Directors and the Chief Executive Officer of the
Company, or in the case of a Subsidiary, the President of the
Subsidiary shall have the duty to inform the Trustee in
writing that the Company and/or a Subsidiary is Insolvent. If
a person claiming to be a creditor of the Company and/or a
Subsidiary alleges in writing to the Trustee that the Company
and/or a Subsidiary has become Insolvent, the Trustee shall
determine whether the Company and/or a Subsidiary is Insolvent
and, pending such determination, the Trustee shall discontinue
payment of benefits to Participants or their Beneficiaries.
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(2) Unless the Trustee has actual knowledge that the Company
and/or a Subsidiary is Insolvent, or has received notice from
the Company and/or a Subsidiary or a person claiming to be a
creditor alleging that the Company's and/or a Subsidiary is
Insolvent, the Trustee shall have no duty to inquire whether
the Company and/or a Subsidiary is Insolvent. The Trustee may
in all events rely on such evidence concerning the Company's
and/or a Subsidiary's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis
for making a determination concerning the Company's and/or a
Subsidiary `s solvency.
(3) If at any time the Trustee has determined that the Company
and/or a Subsidiary is Insolvent, the Trustee shall
discontinue payments to Participants or their Beneficiaries
and shall hold the assets of the Trust for the benefit of the
Company's general creditors and shall hold the assets of the
Trust to the extent contributed on behalf of the employees of
a Subsidiary for the benefit of the Subsidiary's general
creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of Participants or their Beneficiaries to
pursue their rights as general creditors of the Company and/or
a Subsidiary with respect to benefits due under the
Arrangement or otherwise.
(4) The Trustee shall resume the payment of benefits to
Participants or their Beneficiaries in accordance with Section
2 of this Trust Agreement only after the Trustee has
determined that the Company and/or a Subsidiary is not
Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the 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 Participants or their Beneficiaries under the terms of the
Arrangement for the period of such discontinuance, less the aggregate
amount of any payments made to Participants or their Beneficiaries by
the Company and/or a Subsidiary in lieu of the payments provided for
hereunder during any such period of discontinuance.
(d) The Insolvency of a Subsidiary shall not, in and of itself, cause the
Company or any other Subsidiary participating in this Trust to be
Insolvent. However, any assets attributable to such Insolvent
Subsidiary held by this Trust shall be held for the benefit of the
Insolvent Subsdiary's general creditors.
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Section 4. Payments When a Short-Fall of The Trust Assets Occurs
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(a) If there are not sufficient assets for the payment of current and
expected future benefits pursuant to Section 2 or Section 3(c) hereof
and the Company does not otherwise make such payments within a
reasonable time after demand from the Trustee, the Trustee shall
allocate the Trust assets among the Participants or their Beneficiaries
in a pro rata manner with respect to the total present value of
benefits expected for each Participant or Beneficiary.
(b) Upon receipt of a contribution from the Company necessary to make up
for a shortfall in the payments due, the Trustee shall resume payments
to all the Participants and Beneficiaries under the Arrangement. In
addition to the normally scheduled payments due under the Arrangement,
the Trustee shall make a payment to the Participants and Beneficiaries,
as soon as is practicable following the Company's contribution equal to
the amount by which any payment was reduced during the period for which
the Trustee made payments under Section 4(a). Following a Change in
Control, the Trustee shall have the right and duty to compel a
contribution to the Trust from the Company to make-up for any
shortfall.
Section 5. Payments to the Company
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Except as provided in Section 3 hereof, after the Trust has become irrevocable,
the Company shall have no right or power to direct the Trustee to return to the
Company or to divert to others any of the Trust assets before all payment of
benefits have been made to Participants and their Beneficiaries pursuant to the
terms of the Arrangement. Following payment of all benefits due under the
Arrangement and any remaining fees and expenses, the Trustee shall return any
amounts remaining in the Trust to the Company.
Section 6. Investment Authority
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(a) 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 for the exclusive benefit of the Participants and their
Beneficiaries, in good faith and as a prudent person would act in
accomplishing a similar task and in accordance with the terms of this
Trust Agreement and any applicable federal or state laws, rules or
regulations.
(b) Subject to investment guidelines agreed to in writing from time to time
by the Company and the Trustee prior to a Change in Control and Section
6(c), the Trustee shall have the power in investing and reinvesting the
Fund in its sole discretion:
(1) To invest and reinvest in any readily marketable common and
preferred stocks, bonds, notes, debentures (including
convertible stocks and securities but not including any stock
or security of the Trustee other than a de minimus amount held
in a mutual fund), certificates of deposit or demand or time
deposits (including any such deposits with the Trustee) and
shares of investment companies and mutual funds, without being
limited to the classes or property in which the Trustees are
authorized to invest by any law or any rule of court of any
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state and without regard to the proportion any such property
may bear to the entire amount of the Fund;
(2) To invest and reinvest all or any portion of the Fund
collectively through the medium of any proprietary mutual fund
that may be established and maintained by the Trustee;
(3) To commingle for investment purposes all or any portion of the
Fund with assets of any other similar trust or trusts
established by the Company with the Trustee for the purpose of
safeguarding deferred compensation or retirement income or
benefits of its employees and/or directors;
(4) To retain any property at any time received by the Trustee;
(5) 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;
(6) 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;
(7) 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 any assessments levied with respect to
any such property to be deposited;
(8) To extend the time of payment of any obligation held by it;
(9) To hold uninvested any moneys received by it, without
liability for interest thereon, but only in anticipation of
payments due for investments, reinvestments, expenses or
disbursements;
(10) To exercise all voting or other rights with respect to any
property held by it and to grant proxies, discretionary or
otherwise;
(11) For the purposes of the Trust, to borrow money from others, to
issue its promissory note or notes therefor, and to secure the
repayment thereof by pledging any property held by it;
(12) Upon prior notice, to employ suitable contractors and counsel,
who may be counsel to the Company or to the Trustee, and to
pay their reasonable expenses and compensation from the Fund
to the extent not paid by the Company;
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(13) To register investments in its own name or in the name of a
nominee; to hold any investment in bearer form; and to combine
certificates representing securities with certificates of the
same issue held by it in other fiduciary capacities or to
deposit or to arrange for the deposit of such securities with
any depository, even though, when so deposited, such
securities may be held in the name of the nominee of such
depository with other securities deposited therewith by other
persons, or to deposit or to arrange for the deposit of any
securities issued or guaranteed by the United States
government, or any agency or instrumentality thereof,
including securities evidenced by book entries rather than by
certificates, with the United States Department of the
Treasury or a Federal Reserve Bank, even though, when so
deposited, such securities may not be held separate from
securities deposited therein by other persons; provided,
however, that no securities held in the Fund shall be
deposited with the United States Department of the Treasury or
a Federal Reserve Bank or other depository in the same account
as any individual property of the Trustee, and provided,
further, that the books and records of the Trustee shall at
all times show that all such securities are part of the Trust
Fund;
(14) 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;
(15) To hold and retain policies of life insurance, annuity
contracts, and other property of any kind which policies are
contributed to the Trust by the Company or any subsidiary of
the Company or are purchased by the Trustee;
(16) To hold any other class of assets which may be contributed by
the Company and that is deemed reasonable by the Trustee,
unless expressly prohibited herein:
(17) To loan any securities at any time held by it to brokers or
dealers upon such security as may be deemed advisable, and
during the terms of any such loan to permit the loaned
securities to be transferred into the name of and voted by the
borrower or others; and
(18) Generally, to do all acts, whether or not expressly
authorized, that the Trustee may deem necessary or desirable
for the protection of the Fund.
(c) Prior to a Change in Control, the Company shall have the right, subject
to this Section to direct the Trustee with respect to investments.
(1) The Company may at any time direct the Trustee to segregate
all or a portion of the Fund in a separate investment account
or accounts and may appoint one or more investment managers
including itself and to direct the investment and
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reinvestment of each such investment account or accounts. In
such event, the Company shall notify the Trustee of the
appointment of each such investment manager.
(2) Thereafter (until a Change in Control), the Trustee shall make
every sale or investment with respect to such investment
account as directed in writing by the investment manager(s).
It shall be the duty of the Trustee to act strictly in
accordance with each direction. The Trustee shall be under no
duty to question any such direction of the investment manager,
to review any securities or other property held in such
investment account or accounts acquired by it pursuant to such
directions or to make any recommendations to the investment
manager(s) with respect to such securities or other property.
(3) Notwithstanding the foregoing, the Trustee, without obtaining
prior approval or direction from an investment manager, shall
invest cash balances held by it from time to time in short
term cash equivalents including, but not limited to, through
the medium of any short term common, collective or commingled
trust fund established and maintained by the Trustee subject
to the instrument establishing such trust fund, U.S. Treasury
Bills, commercial paper (including such forms of commercial
paper as may be available through the Trustee's Trust
Department), certificates of deposit (including certificates
issued by the Trustee in its separate corporate capacity), and
similar type securities, with a maturity not to exceed one
year; and, furthermore, sell such short term investments as
may be necessary to carry out the instructions of an
investment manager regarding more permanent type investment
and directed distributions.
(4) The Trustee shall neither be liable nor responsible for any
loss resulting to the Fund by reason of any sale or purchase
of an investment directed by an investment manager nor by
reason of the failure to take any action with respect to any
investment which was acquired pursuant to any such direction
in the absence of further directions of such investment
manager.
(5) Notwithstanding anything in this Agreement to the contrary,
the Trustee shall be indemnified and saved harmless by the
Company from and against any and all personal liability to
which the Trustee may be subjected by carrying out any
directions of an investment manager or the Company issued
pursuant hereto or for failure to act in the absence of
directions of the investment manager or the Company including
all expenses reasonably incurred in its defense in the event
the Company fails to provide such defense; provided, however,
the Trustee shall not be so indemnified if it participates
knowingly in, or knowingly undertakes to conceal, an act or
omission of an investment manager or the Company, having
actual knowledge that such act or omission is a breach of a
fiduciary duty; provided further, however, that the Trustee
shall not be deemed to have knowingly participated in or
knowingly undertaken to conceal an act or omission of an
investment manager or the Company with knowledge that such act
or omission was a breach of fiduciary duty by merely complying
with directions of
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an investment manager or the Company or for failure to act in
the absence of directions of an investment manager or the
Company. The Trustee may rely upon any order, certificate,
notice, direction or other documentary confirmation purporting
to have been issued by the investment manager or the Company
which the Trustee reasonably believes to be genuine and to
have been issued by the investment manager or the Company. The
Trustee shall not be charged with knowledge of the termination
of the appointment of any investment manager until it receives
written notice thereof from the Company.
(6) The Company may direct the Trustee as to how to vote any
Company stock held by the Trust.
(d) Following a Change in Control, the Trustee shall have the sole and
absolute discretion in the management of the Trust assets and shall
have all the powers set forth under Section 6(b). In investing the
Trust assets, the Trustee shall consider.
(1) the needs of the Arrangement;
(2) the need for matching of Trust assets with the liabilities of
the Arrangement; and
(3) the duty of the Trustee to act solely in the best interest of
the Participants and their Beneficiaries.
(e) The Trustee shall have the right, in its sole discretion, to delegate
its investment responsibility to an investment manager who may be an
affiliate to the Trustee. In the event the Trustee shall exercise this
right, the Trustee shall remain, at all times responsible for the acts
of an investment manager. The Trustee shall have the right to purchase
an insurance policy or an annuity to fund the benefits of the
Arrangement.
(f) The Company shall have the right at any time, and from time to time in
its sole discretion, to substitute assets of equal fair market value
for any asset held by the Trust. This right is exercisable by the
Company in a nonfiduciary capacity without the approval or consent of
any person in a fiduciary capacity; provided, however, that, following
a Change in Control, no such substitution shall be permitted unless the
Trustee determines that the fair market values of the substituted
assets are equal.
(g) Prior to a Change in Control, the Company shall have the right to
contribute to the Trust common stock of the Company ("Company Stock").
To the extent that Company Stock is contributed to the Trust, it shall
be held by the Trustee pursuant to this Section 6(g).
(h) Execution of Purchases and Sales.
(1) Transactions. Purchases and sales of Company Stock shall be made on
the date on which the Trustee receives from the Company in good order
all information and documentation necessary to accurately effect such
purchases and sales (or, in the case of purchases, the subsequent date
on which the Trustee has received a wire transfer of the
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funds necessary to make such purchases). Purchases and sales of Company
Stock for the Stock Fund shall be made on the open market as necessary
unless the following applies:
(i) The Trustee is unable to determine the number of shares
required to be purchased or sold on such day; or
(ii) If the Trustee is unable to purchase or sell the total number
of shares required to be purchased or sold on such day as a
result of market conditions; or
(iii) If the Trustee is prohibited by the Securities and Exchange
Commission, the New York Stock Exchange, or any other
regulatory body form purchasing or selling any or all of the
shares required to be purchased or sold on such days.
In the event of the occurrence of the circumstances described in (i),
(ii) or (iii) above, the Trustee shall purchase or sell such shares as
soon as possible thereafter and shall determine the price of such
purchases or sales to be the average purchase or sales price of all
such shares purchased or sold, respectively. The Trustee may follow
written directions from the Company to deviate from the above purchase
and sale procedures.
(1) Use of an Affiliated Broker. The Company hereby directs the Trustee to
use Wachovia Securities, Inc. (WSI) to provide brokerage services in
connection with any purchase or sale of Company Stock subject to the
requirement that the Trustee take all reasonable steps to assure that
the Trust receives best execution on any transaction. The provision of
brokerage services shall be subject to the following:
(i) To the extent such services are utilized, as consideration for
such brokerage services, the Company agrees that WSI shall be
entitled to remuneration under the authorization provision in
accordance with its normal fee schedule.
(ii) Any successor organization of WSI, through reorganization,
consolidation, merger or similar transactions, shall, upon
consummation of such transaction, become the successor broker
in accordance with the terms of this authorization provision.
(iii) The Trustee and WSI shall continue to rely on this
authorization provision until notified to the contrary. The
Company reserves the right to terminate this authorization
upon sixty (60) days written notice to WSI (or its successor)
and the Trustee.
(2) Securities Law Reports. The Company shall be responsible for filing all
reports required under Federal or state securities laws with respect to
the
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Trust's ownership of Company Stock, including, without limitation,
any reports required under section 13 or 16 of the Securities
Exchange Act of 1934, and shall immediately notify the Trustee in
writing of any requirement to stop purchases or sales of Company
Stock pending the filing of any report. The Company shall be
responsible for the registration of any Plan interests required
under Federal or state securities laws. The Trustee shall provide
to the Company such information on the Trust's ownership of
Company Stock as the Company may reasonably request in order to
comply with Federal or state securities laws.
Section 7. Insurance Contracts
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(a) To the extent that the Trustee is directed by the Company prior to a
Change in Control to invest part or all of the Trust Fund in insurance
contracts, the type and amount thereof shall be specified by the
Company. The Trustee shall be under no duty to make inquiry as to the
propriety of the type or amount so specified.
(b) Each insurance contract issued shall provide that the Trustee shall be
the owner thereof with the power to exercise all rights, privileges,
options and elections granted by or permitted under such contract or
under the rules of the insurer. The exercise by the Trustee of any
incidents of ownership under any contract shall, prior to a Change in
Control, be subject to the direction of the Company. After a Change in
Control, the Trustee shall have all such rights.
(c) The Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion
of the policy to a different form) other than to a successor Trustee,
or to loan to any person the proceeds of any borrowing against an
insurance policy held in the Trust Fund.
(d) No insurer shall be deemed to be a party to the Trust and an insurer's
obligations shall be measured and determined solely by the terms of
contracts and other agreements executed by the insurer.
Section 8. Disposition of Income
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(a) Prior to a Change in Control, all income received by the Trust, net of
expenses and taxes, may be returned to the Company or accumulated and
reinvested within the Trust at the direction of the Company.
(b) Following a Change in Control, all income received by the Trust, net of
expenses and taxes payable by the Trust, shall be accumulated and
reinvested within the Trust.
Section 9. Accounting by The Trustee
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The Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in
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writing between the Company and the Trustee. Within thirty (30) days following
the close of each calendar year and within thirty (30) days after the removal or
resignation of the Trustee, the Trustee shall deliver to the 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.
The Company may approve such account by an instrument in writing delivered to
the Trustee. In the absence of the Company's filing with the Trustee objections
to any such account within one hundred eighty (180) days after its receipt, the
Company shall be deemed to have so approved such account. In such case, or upon
the written approval by the Company of any such account, the Trustee shall, to
the extent permitted by law, be discharged from all liability to the Company for
its acts or failures to act described by such account. The foregoing, however,
shall not preclude the Trustee from having its accounting settled by a court of
competent jurisdiction. The Trustee shall be entitled to hold and to commingle
the assets of the Trust in one Fund for investment purposes but at the direction
of the Company prior to a Change in Control, the Trustee shall create one or
more sub-accounts.
Section 10. Responsibility of The Trustee
-----------------------------
(a) The 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 the Trustee shall incur no liability to any person for
any action taken pursuant to a direction, request or approval given by
the Company which is contemplated by, and in conformity with, the terms
of the Arrangement or this Trust and is given in writing by the
Company. In the event of a dispute between the Company and a party, the
Trustee may apply to a court of competent jurisdiction to resolve the
dispute, subject, however to Section 2(d) hereof.
(b) The Company hereby indemnifies the Trustee against losses, liabilities,
claims, costs and expenses in connection with the administration of the
Trust, unless resulting from the negligence or misconduct of Trustee.
To the extent the Company fails to make any payment on account of an
indemnity provided in this paragraph 10(b), in a reasonably timely
manner, the Trustee may obtain payment from the Trust. If the Trustee
undertakes or defends any litigation arising in connection with this
Trust or to protect a Participant's or Beneficiary's rights under the
Arrangement, the Company agrees to indemnify the Trustee against the
Trustee's costs, reasonable expenses and liabilities (including,
without limitation, attorneys' fees and expenses) relating thereto and
to be primarily liable for such payments. If the Company does not pay
such costs, expenses and liabilities in a reasonably timely manner, the
Trustee may obtain payment from the Trust. The Trustee hereby
indemnifies the Company against losses, liabilities, claims, costs and
expenses in connection with the administration of the Trust which occur
as a result of the Trustee's negligence or breach of this Trust.
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(c) Prior to a Change in Control, the Trustee may consult with legal
counsel (who may also be counsel for the Company generally) with
respect to any of its duties or obligations hereunder. Following a
Change in Control the Trustee shall, upon notice to the Company, select
independent legal counsel and may consult with counsel or other persons
with respect to its duties and with respect to the rights of
Participants or their Beneficiaries under the Arrangement.
(d) The Trustee may, upon notice to the Company, hire agents, accountants,
actuaries, investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or
obligations hereunder and may rely on any determinations made by such
agents and information provided to it by the Company.
(e) The Trustee shall have, without exclusion, all powers conferred on the
Trustee by applicable law, unless expressly provided otherwise herein.
(f) Notwithstanding any powers granted to the Trustee pursuant to this
Trust Agreement or to applicable law, the Trustee shall not have any
power that could give this Trust the objective of carrying on a
business and dividing the gains therefrom, within the meaning of
section 301.7701-2 of the Procedure and Administrative Regulations
promulgated pursuant to the Internal Revenue Code.
Section 11. Compensation and Expenses of The Trustee
----------------------------------------
The Trustee's compensation shall be as agreed in writing from time to time by
the Company and the Trustee. A copy of the current fee schedule is listed in
Attachment A. The Company shall pay all administrative expenses and the
Trustee's fees and shall promptly reimburse the Trustee for any fees and
expenses of its agents. If not so paid, the fees and expenses shall be paid from
the Trust.
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Section 12. Resignation and Removal of The Trustee
--------------------------------------
(a) Prior to a Change in Control, the Trustee may resign at any time by
written notice to the Company, which shall be effective xxxxxx (30)
days after receipt of such notice unless the Company and the Trustee
agree otherwise. Following a Change in Control, the Trustee may resign
only after the appointment of a successor Trustee.
(b) The Trustee may be removed by the Company on thirty (30) days notice or
upon shorter notice accepted by the Trustee prior to a Change in
Control. Subsequent to a Change in Control, the Trustee may only be
removed after the Company's appointment of an independent third party
national banking association or other entity having the authority to
exercise trust powers with a market capitalization exceeding
$5,000,000,000 to replace the Trustee and the agreement by the
successor Trustee to a trust agreement containing the provisions of
Sections 2(c) and 14(a) hereof.
(c) If the Trustee resigns within two years after a Change in Control, as
defined herein, the Company, or if the Company fails to act within a
reasonable period of time following such resignation, the Trustee shall
apply to a court of competent jurisdiction for the appointment of a
successor Trustee which satisfies the requirements of Section 13 or for
instructions.
(d) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within ninety (90)
days after receipt of notice of resignation, removal or transfer,
unless the Company extends the time limit.
(e) If the Trustee resigns or is removed, a successor shall be appointed by
the Company, in accordance with Section 13 hereof, by the effective
date of resignation or removal under paragraph(s) (a) or (b) of this
Section. If no such appointment has been made, the Trustee may apply to
a court of competent jurisdiction for appointment of a successor or for
instructions. All expenses of the Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
Section 13. Appointment of Successor
------------------------
(a) If the Trustee resigns or is removed in accordance with Section 12
hereof, the Company may appoint, subject to Section 12, any independent
third party national banking association or other entity having the
authority to exercise trust powers with a market capitalization
exceeding $5,000,000,000 to replace the Trustee upon resignation or
removal. The successor Trustee shall have all of the rights and powers
of the former Trustee, including ownership rights in the Trust. The
former Trustee shall execute any instrument necessary or reasonably
requested by the Company or the successor Trustee to evidence the
transfer.
(b) 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 Section 8 and 9 hereof. The successor Trustee shall not be
responsible for and the Company shall indemnify and defend the
successor Trustee from any claim or liability resulting from any action
or inaction of any
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prior Trustee or from any other past event, or any condition existing
at the time it becomes successor Trustee.
Section 14. Amendment or Termination
------------------------
(a) This Trust Agreement may be amended by a written instrument executed by
the Trustee and the Company. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Arrangement or shall
make the Trust revocable after it has become irrevocable in accordance
with Section 1 hereof. Additionally, no amendment may be made which
would change Section 2(c) hereof.
(b) Following a Change in Control, the Trust shall not terminate until the
date on which Participants and their Beneficiaries have received all of
the benefits due to them under the terms and conditions of the
Arrangement.
(c) Upon written approval of all Participants or Beneficiaries entitled to
payment of benefits pursuant to the terms of the Arrangement, the
Company may terminate this Trust prior to the time that all benefit
payments under the Arrangement have been made. All assets in the Trust
at termination shall be returned to the Company.
Section 15. Definitions
-----------
For purposes of this Trust, the following terms shall be defined as set forth
below:
(a) Potential Change in Control shall mean the Company entering into any
agreement or making any announcement either of which, if consummated
would result in a Change in Control.
(b) Change in Control the happening of any of the following events:
(1) An acquisition by any Person of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
twenty percent (20%) or more of either (i) the then outstanding
shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); excluding, however, the following: (A) any
acquisition directly from the Company, other than an acquisition
by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the
Company, (B) any acquisition by the Company, (C) any acquisition
by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any entity controlled by the Company,
or (D) any acquisition pursuant to a transaction which complies
with Subsections (i), (ii) and (iii) of Subsection (C) of this
Section 15(b);
(2) A change in the composition of the Board such that the individuals
who, as of the Effective Date, constitute the Board (such Board
will be hereinafter referred to as the "Incumbent Board") cease
for any reason to constitute at least a majority of the
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Board; provided, however, for purposes of this Section 15(b), that
any individual who becomes a member of the Board subsequent to the
Effective Date, whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a
majority of those individuals who are members of the Board and who
were also members of the Incumbent Board (or deemed to be such
pursuant to this proviso) will be considered as though such
individual were a member of the Incumbent Board; but, provided
further, that any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board will not be so considered as a
member of the Incumbent Board;
(3) Consummation of a reorganization, merger or consolidation, sale or
other disposition of all or substantially all of the assets of the
Company, or acquisition by the Company of the assets or stock of
another entity ("Corporate Transaction"); excluding, however, such
a Corporate Transaction pursuant to which (i) all or substantially
all of the individuals and entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or
indirectly, more than sixty percent (60%) of, respectively, the
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 Corporate Transaction (including,
without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (other than the
Company, any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, twenty
percent (20%) or more of, respectively, the outstanding shares of
common stock of the corporation resulting from such Corporate
Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the
election of directors except to the extent that such ownership
existed prior to the Corporate Transaction, and (iii) individuals
who were members of the Incumbent Board will constitute at least a
majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or
(4) The approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
In addition, a Change in Control will be deemed to occur upon a change in
control of FMC Corporation, as determined under the change in control
provisions of FMC Corporation's executive severance plan, if at the time of its
change in control, FMC Corporation owns more than fifty percent (50%) of the
Outstanding Company Common Stock. Notwithstanding the foregoing,
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neither the initial public offering by the Company of shares of its common
stock, nor FMC Corporation's Distribution of its interest in the Company will be
treated as a Change in Control of the Company.
The General Counsel, the Chief Executive Officer or the Chief Financial Officer
of the Company shall have the specific authority to determine whether a
Potential Change in Control or Change in Control has transpired under the
guidance of this Section 15(b) and shall be required to give the Trustee notice
of a Change in Control or a Potential Change in Control. The Trustee shall be
entitled to rely upon such notice, but if the Trustee receives notice of a
Change in Control from another source, the Trustee shall make its own
independent determination.
(c) "Company" shall mean the FMC Technologies, Inc. unless otherwise
specified by this Trust.
(d) Required Funding Amount shall mean an amount equal to:
(1) the present value of all benefits using assumptions identical
to those used for the most recent evaluation for FAS 87
purposes of the Company's 10K for the Arrangement; and
(2) anticipated trustee, administrative and advisory fees in
connection with the maintenance of the Trust or the
Arrangement until the Company's obligations under the
Arrangement have been fully met, and any taxes expected to be
due over the remaining duration of the Trust.
(d) "Subsidiary" shall mean a subsidiary or an affiliate of the Company.
Section 16. Miscellaneous
-------------
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating
the remaining provisions hereof.
(b) The Company hereby represents and warrants that all of the Arrangement
have been established, maintained and administered in accordance with
all applicable laws, including without limitation, ERISA. The Company
hereby indemnifies and agrees to hold the Trustee harmless from all
liabilities, including attorney's fees, relating to or arising out of
the establishment, maintenance and administration by the Company of the
Arrangement. To the extent the Company does not pay any of such
liabilities in a reasonably timely manner, the Trustee may obtain
payment from the Trust.
(c) Benefits payable to Participants and their Beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at law or in
equity), alienated, pledged, encumbered or subjected to attachment,
garnishment, levy, execution or other legal or equitable process.
(d) This Trust Agreement shall be governed by and construed in accordance
with the laws of North Carolina.
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IN WITNESS WHEREOF, this Trust has been executed on behalf of the parties hereto
on the day and year first above written.
FMC TECHNOLOGIES, INC. WACHOVIA BANK, N.A. as TRUSTEE
By: /s/ Xxxxxxx X. Xxxxxxxx III By: /s/ Xxx X. Xxxx
--------------------------------- --------------------------------
Its: Senior V.P. and Chief Financial Officer Its: Senior Vice President/Group Executive
--------------------------------------- -------------------------------------
ATTEST: ATTEST:
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxx, III
--------------------------------- --------------------------------
Its: Vice President - Human Resources Its: Assistant Secretary
--------------------------------- -----------------------------
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Attachment A
SCHEDULE OF FEES--FMC Technologies, Inc. Salaried Employees
Equivalent Retirement Plan
WACHOVIA EXECUTIVE SERVICES -
EXECUTIVE COMPENSATION AND OTHER
NON-QUALIFIED TRUST SERVICES
--------------------------------------------------------------------------------
Non-qualified Trust Services include
rabbi, secular and other non-qualified
trusts providing benefits in addition
to those from qualified plans. Plans
specifically providing for change of
control benefits are also covered by
this Schedule of Fees. Charges are
quoted on an annual basis and are
payable quarterly.
STANDARD SERVICES
--------------------------------------------------------------------------------
I. DOCUMENT REVIEW AND IMPLEMENTATION A Document Review and Implementation
Fee will be charged to all new
accounts. This fee will be quoted by
account, based on the use of Wachovia's
proprietary documents, consulting and
legal time required, as well as
administrative requirements to
establish the account.
II. CUSTODIAL AND FIDUCIARY CHARGES Ad Valorem Charges - An ad valorem fee
is assessed for all basic services
related to custody of funds and is
based on the total liability of all
covered plans or Arrangement. This fee
covers up to 5 (five) funds. The
following is the schedule of charges:
MARKET VALUE RATE PER $1,000
------------ ---------------
First $ 500,000 $5.00
Next 1,500,000 2.60
Next 8,000,000 1.40
Next 40,000,000 .50
Next 50,000,000 .40
Over 100,000,000 Negotiated
A minimum ad valorem charge of $20,000
shall be applied. Fees covered by
Section III-IV and VII of this schedule
will be in addition to the minimum ad
valorem charge.
Insurance, Letter of Credit and In applying the ad valorem schedule,
other Non- the cash surrender value of insurance,
letters of credit, unfunded liabilities
and other non-cash funding will
normally be discounted 75% prior to
change of
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Cash Funding control. Following a change
of control, this discount will no
longer be used in computing ongoing
fees, and Wachovia will normally manage
assets not invested in insurance
products.
Employer Securities In applying the ad valorem schedule,
employer securities will normally be
discounted 50% prior to change of
control. Following change of control,
this discount will no longer be used in
computing ongoing fees.
Research Requests for research will be performed
at a cost of $100 per hour.
Additional Funds $500.00
Insurance Policy Storage $5.00 per policy
III. INVESTMENT MANAGEMENT For individually managed portfolios, a
separate schedule will apply.
Proprietary mutual funds will be
charged in accordance with the
applicable prospectus. Any money market
fund must be a Wachovia Fund.
Wachovia Asset Management
IV. BENEFIT PAYMENTS AND WIRES
Cash Benefit Payments
Periodic: By check $2.50 plus postage
By ACH $1.00 plus postage
Non-Periodic: $25.00 plus postage
In-Kind Distributions $50.00
Payment Set-up $100.00
Stop Payments $20.00 initialization
Wires $20.00 each
V. TAX REPORTING
State Tax Withholding An annual charge of $75 per account
will apply for each state where
withholdings are requested or required.
Preparation and Filing of Form For each 1041 required to be prepared
1041 and filed, a fee of $150 will be
charged.
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VI. CHANGE OF CONTROL FEE A one-time, $25,000 minimum fee plus
expenses will be charged for each
change of control in addition to fees
for ongoing services.
VII. OTHER SERVICES Financial planning services for
individuals and group educational or
communications materials are available.
Fees will be negotiated prior to
commencement.
Billable time plus out-of-pocket
expenses will be charged for consulting
services or other services not covered
by this schedule.
Meetings requiring the attendance of
one of Wachovia Executive Services'
Consultants are subject to a per diem
fee of $1,000 per day, per consultant,
plus travel expenses.
Participant recordkeeping and
performance measurement services shall
be charged in accordance with separate
schedules.
For on-line and PC downloading support,
appropriate additional charges will be
made.
The physical storage of insurance
policies is not included in the above
charges.
For account terminations less than two
years from inception, a minimum,
prorated ad valorem fee for the initial
two year period plus expenses will be
charged.
Additional reasonable fees will be
charged for services not covered by
this schedule.
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