TRUST AGREEMENT
Exhibit 10
(n)
THIS TRUST AGREEMENT (hereinafter
referred to as "Agreement") made as of this 19th day of January 1990, by and
between Tasty Baking Company, a Pennsylvania Corporation (hereinafter referred
to as "Company"), and Meridian Trust Company (hereinafter referred to as
"Trustee").
W I T N E
S S E T H:
WHEREAS, On October 16, 1987, the
Company established a Retirement Plan for Directors (hereinafter referred to as
"Plan"), attached hereto as Exhibit "A", which grants retirement benefits to
members of the Board of Directors of the Company (hereinafter referred to as
"Directors"); and
WHEREAS, the Company wishes to
establish a trust (hereinafter called "Trust") and to transfer to the Trust, but
only upon a Potential Change of Control of the Company, a certain sum of money
which shall be held therein, subject to the claims of the Company's creditors in
the event of the Company's insolvency, until paid to the Directors as
beneficiaries of the Trust (hereinafter referred to as "Trust Beneficiaries") as
retirement income benefits (hereinafter referred to as "Benefits") in such
amount and manner and at such times as specified in the Plan; and
WHEREAS, the Trustee is independent
of, and is not subject to the direct or indirect control of, either the Company
or the Trust Beneficiaries;
NOW, THEREFORE, the parties do hereby
establish the Trust and agree that the Trust shall be comprised, held and
disposed of as follows:
ARTICLE I:
TRUST FUND.
A. Except as provided in Article IV,
the Trust hereby established shall be irrevocable.
B. The Trust is intended to be a
grantor trust, within the meaning of Section 671 of the Internal Revenue Code of
1986, as amended, and shall be construed accordingly.
C. The principal of the Trust, and
any earnings thereon which are not paid to the Company as provided in Article IV
and Article V, shall be held separate and apart from other funds of the Company
and shall be used exclusively for the uses and purposes herein set forth.
Neither the Trust Beneficiaries, nor the Plan, shall have any preferred claim
on, or any beneficial ownership interest in, any assets of the Trust prior to
the time such assets are paid to the Trust Beneficiaries as Benefits as provided
in Article III of this Agreement. All rights created under the Plan and this
Agreement in the Trust Beneficiaries shall be mere unsecured contractual rights
against the Company.
ARTICLE
II: CONTRIBUTIONS BY THE COMPANY.
A. Upon a Potential Change in Control
(as hereinafter defined) of the Company, the Company shall transfer to the
Trustee that sum of money which is sufficient to purchase from an insurance
company (the "Insurance Company") with a rating of B or better in Best's
annuities which will provide the benefits in the amounts and at the times due to
all Trust Beneficiaries of the Plan. For purposes of determining the purchase
price of such annuity policies, the retirement date for the Directors who are
Trust Beneficiaries shall be presumed to be the date upon which the Potential
Change in Control occurred.
B. A Potential Change in Control
occurs when the Company (1) has entered into an agreement, the consummation of
which would result in the occurrence of a Change in Control of the Company; (2)
any person or entity has publicly announced an intention to take or consider
taking actions which if consummated would constitute a Change in Control of the
Company; (3) any person or entity, excluding persons or entities who on the date
hereof have such "beneficial ownership", has become the "beneficial owner" (as
determined pursuant to Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934), directly or indirectly, of securities of the Company representing 10%
or more of the combined voting power of the Company's then outstanding
securities; or (4) the Board of Directors of the Company has adopted a
resolution to the effect that such a Potential Change in Control of the Company
has occurred.
C. A Change in Control is that change
in control of the Company which is of a nature which would be required to be
reported to the Securities and Exchange Commission pursuant to Schedule 14A of
Regulation 14A or any successor provision (whether or not the Company is then
subject to such reporting requirements). A Change in Control will be deemed to
have occurred if any person other than persons or entities who on the date
hereof have such "beneficial ownership", is or becomes the "beneficial owner"
(as determined pursuant to Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934) of 25% or more of the combined voting power of the outstanding
securities of the Company, or if during any two consecutive year periods, the
directors at the beginning of such periods cease for any reason during the
two-year period to constitute a majority of the Board of Directors of the
Company.
D. If a Change in Control occurs, the
Trustee shall purchase an annuity contract with respect to each Trust
Beneficiary providing monthly payments to the Trustee of amounts due the Trust
Beneficiary under the Plan. Written notice of such event received by the Trustee
from the Board of Directors or the Chief Executive Officer of the Company shall
be sufficient evidence of a Change of Control. Upon a Change in Control, the
Company shall contribute to the Trust such additional sums as shall reflect a
recomputation of the Trust Beneficiaries' Benefits as of the date of the
commencement of payment of such Benefits.
E. The Trustee shall cause each
annuity contract to contain a provision requiring, on notice to the Insurance
Company from the Trustee, the cessation of payments in the event the Company
becomes insolvent within the meaning of Article IV of this Trust Agreement and
the payment of such annuities or the cash surrender value thereof to the person
or entity entitled thereto under Article IV.B.2 of this Trust
Agreement.
F. If a Change in Control does not
occur within one year of the Potential Change in Control, then all sums
contributed to the Trust by the Company shall be returned to the Company
together with any income earned thereon.
ARTICLE
III: PAYMENT TO TRUST BENEFICIARIES.
A. The Trustee shall make payments of
Benefits to the Trust Beneficiaries from the assets of the Trust in accordance
with the terms set forth in the Plan, if and to the extent (i) assets are
available for distribution; and (ii) at the time of each payment the Trustee
does not have actual knowledge of the insolvency of the Company as provided in
Article IV.C.
B. If the assets of the Trust, which
are not paid to the Company as provided in Article IV, are not sufficient to
make payments to the Trust Beneficiaries in accordance with the terms set forth
in the Plan, the Trustee shall xxxxx the payments pro rata and the Company shall
pay the balance of any such payments as they fall due.
ARTICLE
IV: TRUSTEE'S RESPONSIBILITY WHEN THE
COMPANY IS
INSOLVENT.
A. The Company shall be considered
insolvent for the purposes of this Agreement if (i) the Company is unable to pay
its debts as they mature, or (ii) the Company is subject to a pending proceeding
as a debtor under the 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 as hereinafter set
forth.
1. At such time as the Trustee has
actual knowledge, or has determined, that the Company is insolvent, the Trustee
shall deliver the Trust assets to satisfy such claims in such manner as a court
of competent jurisdiction may direct.
2. The Board of Directors and the
Chief Executive Officer of the Company shall inform the Trustee in the event the
Company becomes insolvent. If the Company or a person claiming to be a creditor
of the Company alleges in writing to the Trustee that the Company has become
insolvent, the Trustee shall independently determine, within 30 days after
receipt of such notice, whether the Company in insolvent. Pending such
determination, the Trustee shall notify the Insurance Company to discontinue
payments to the Trust and the Trustee shall hold the Trust assets for the
benefit of the Company's general creditors. The Trustee shall notify the
Insurance Company to resume payments to the Trust and the Trustee shall resume
payments to the Trust Beneficiaries in accordance with Article III of this
Agreement only after the Trustee has determined that the Company is not
insolvent (or is no longer insolvent, if the Trustee initially determined the
Company to be insolvent).
3. Unless the Trustee has actual
knowledge of the Company's insolvency, the Trustee shall have no duty to inquire
whether the Company is insolvent and shall continue making payments to Trust
Beneficiaries until he has such actual knowledge. The Trustee may in all events
rely on such evidence concerning the Company's solvency as may be furnished to
the Trustee which will give the Trustee a reasonable basis for making a
determination concerning the Company's solvency.
4. Nothing in this Trust Agreement
shall in any way diminish any rights of a Trust Beneficiary to pursue his rights
as a general creditor of the Company with respect to his Benefits.
C. If the Insurance Company
discontinues payments to the Trust pursuant to Article IV.B, of the Agreement,
and subsequently resumes such payments, the first payment to the Trust
Beneficiaries following such discontinuance shall include the aggregate amount
of all payments which would have been made to the Trust Beneficiaries (together
with interest on the amount delayed calculated at the long-term applicable
federal rate) in accordance with the terms set forth in the Plan during the
period of such discontinuance, less the aggregate amount of any payments made to
the Trust Beneficiaries by the Company in lieu of the payments provided for
hereunder during any such period of discontinuance.
ARTICLE V:
PAYMENT TO THE COMPANY.
Except as provided in Article II.F
and Article IV, the Company may not direct the Trustee to return to the Company
or to divert to others any of the Trust assets before all payments have been
made to the Trust Beneficiaries pursuant to the terms set forth in the
Plan.
ARTICLE
IV: ACCOUNTING BY THE TRUSTEE.
A. The Trustee shall keep accurate
and detailed records of all investments, receipts, disbursements, and all other
transactions required to be done, including such specific records as shall be
agreed upon in writing between the Company and the Trustee. All such accounts,
books and records shall be open to inspection and audit at all reasonable times
by the Company and by the Trust Beneficiaries.
B. Within 90 days following the close
of each calendar year and within 90 days after the removal or resignation of the
Trustee, the Trustee shall deliver to the Company and the Trust Beneficiaries 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 the Trustee, 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.
ARTICLE
VII: DUTIES AND POWERS OF THE TRUSTEE.
A. The Trustee shall act with the
care, skill, prudence and diligence under the circumstances then prevailing that
a prudent man acting in a 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 anyone for any
action taken pursuant to a direction, request, or approval given by the Company
or the Trust Beneficiaries contemplated by and complying with the terms of this
Agreement and/or the Plan, and to that extent shall be relieved of the prudent
man rule for investments.
B. The Trustee shall not be required
to undertake or to defend any litigation arising in connection with this
Agreement, unless it be first indemnified by the Company against its prospective
costs, expenses and liability, and the Company hereby agrees to indemnify the
Trustee for such costs, expenses and liability.
C. The Trustee may consult with legal
counsel (who may also be counsel for the Trustee generally) with respect to any
of the Trustee's duties or obligations hereunder, and shall have no liability
for any losses occasioned by the Company or any Trust Beneficiary as a result of
acting or refraining from acting in accordance with the advice of such
counsel.
D. The Trustee may hire agents,
accountants, actuaries and financial consultants.
E. The Trustee shall have, without
exclusion, all powers conferred on Trustees by applicable law unless expressly
provided otherwise herein; provided, however, that if an insurance policy is
held as an asset of the Trust in order to fund the Supplemental Benefits payable
to the Trust Beneficiaries:
1. The Trustee shall have no power,
except in accordance with Article III of this Agreement, to name as a
beneficiary of any policy any person or entity 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 such policy.
2. The Trust shall own any insurance
policies purchased hereunder outright, subject to any claims of creditors as
provided in Article IV.B of this Agreement.
3. The Insurance Company shall not be
responsible to see to the execution of performance of this Trust.
ARTICLE
VIII: COMPENSATION AND EXPENSES OF THE TRUSTEE.
The Trustee shall be entitled to
receive from the Company such reasonable compensation for his services as shall
be agreed upon by the Company and the Trustee. All expenses incurred with
respect to the administration of the Trust shall be paid by the Company,
including, without limitation, expenses for items expressly referred to in
Article VII.
ARTICLE
IX: REPLACEMENT OF THE TRUSTEE.
A. The Trustee may be removed at any
time by the Company, with the consent of the Trust Beneficiaries, or may resign,
in which case a new trustee, which shall be independent and not subject to
direct or indirect control of, or an agent of, either the Company or the Trust
Beneficiaries, shall be appointed by the Company with the consent of the Trust
Beneficiaries.
B. Any successor Trustee shall have
all of the powers of the original Trustee.
C. No bond shall be required of any
Trustee.
D. The Company releases and
discharges the Trustee and his successors of and from all liability for any act
of omission or commission as long as they act in good faith.
ARTICLE X:
AMENDMENT OR TERMINATION.
A. This Agreement may be amended any
time and to any extent by a written instrument executed by the Trustee and the
Company and consented to by all of the Trust Beneficiaries.
B. The Trust shall not terminate
until the date on which the Trust Beneficiaries are entitled to no more Benefits
pursuant to the Plan, unless sooner rendered inoperative in accordance with
Article IV.B.1 of this Agreement.
C. Upon termination of the Trust as
provided in Article X.B of this Agreement, any assets remaining in the Trust
shall be returned to the Company after all debts and obligations of the Trust
then outstanding shall have been satisfied from such assets.
ARTICLE
XI: ALIENATION AND ASSIGNMENT.
Amounts payable to the Trust
Beneficiaries under this Agreement may not be anticipated, assigned (either at
law or in equity), alienated or subject to attachment, garnishment, levy,
execution or other legal or equitable process.
ARTICLE
XII: MISCELLANEOUS.
A. Notices. Notice to the parties to
this Agreement shall be sent to:
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Company:
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Tasty
Baking Company
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c/o
Xxxxxx X. Xxxxxx, President
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0000
Xxxxxxx Xxxx Xxxxxx
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Xxxxxxxxxxxx,
XX 00000
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and
Trustee:
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Meridian
Trust Company
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0
Xxxx Xxxxxx Xxxxx
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Xxxxxxxxxxxx,
XX 00000
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and
Trust
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Beneficiaries:
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Xx.
Xxxxxx X. Xxxx, Xx.
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0000
Xxxxxxx Xxxx
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Xxxxxx,
XX 00000
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with
a copy to each Trust Beneficiary
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at
his address of record with the
Company.
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B. Waiver of Provisions. Any waiver
at any time by either party hereto of its rights with respect to any matter
arising in connection with this Agreement shall not be deemed to be a waiver
with respect to any subsequent matter. Any waiver at any time by either party
hereto as to any right under this Agreement shall not affect any other right or
obligation held by such party under this Agreement.
C. Alteration of Terms. No alteration
or variation of the terms of this Agreement shall be valid unless in writing and
signed by the parties hereto.
D. Board of Directors. Whenever
reference is made in this Agreement to the Board of Directors of the Company the
reference shall be only to such members who are not entitled to receive benefits
under the Plan at the time of the action referred to and a majority of that
number shall constitute action by the Board of Directors for purposes of this
Agreement.
E. Valid and Binding Agreement. The
Company and the Trustee intend to be legally bound by this Agreement in
accordance with its terms.
F. Governing Law. This Agreement
shall be governed by and construed in accordance with the laws of the
Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the Company and
the Trustee have executed or caused its authorized officers to execute this
Agreement as of the date first above written.
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Attest:
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TASTY
BAKING COMPANY
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/s/
Xxxxxxxxx X. Xxxxxxx
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By:/s/
X. X. Xxxx, Xx.
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Secretary
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The
Trustee hereby accepts the Trust:
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/s/
Xxxxxx X. XxXxx
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Trustee
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COMMONWEALTH
OF PENNSYLVANIA
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:
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: SS.
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COUNTY
OF
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:
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On this, the 19th day of January,
1990, before me, the undersigned Notary Public, personally appeared X. X. Xxxx,
Xx. who acknowledged himself to be an officer of TASTY BAKING COMPANY, a
corporation, and that he as such being authorized to do, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as officer.
IN WITNESS WHEREOF, I have hereunto
set my hand and official seal.
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/s/
Xxxxxx X. Xxxxxxxxx
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Notary
Public
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My
Commission Expires:
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Notarial
Seal
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Xxxxxx
Xxxxxxxxx, Notary Public
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Philadelphia,
Philadelphia County
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My
Commission Expires July 22, 1992
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Member,
Pennsylvania Association of
Notaries
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November
30, 2006
SEI
Private Trust Company
Xxx
Xxxxxxx Xxxxxx Xxxxx
Xxxx,
Xxxxxxxxxxxx 00000
Attention: Xxxx
Xxxxxxx, Vice-President
Re: Trust Administrative
Procedures
Ladies and
Gentlemen:
I, the
undersigned, am a duly authorized representative of Tasty Baking Company, a
Pennsylvania corporation (the “Company”). The Company previously
entered into certain trust agreements with Wachovia Bank, NA, successor to
Meridian Trust Company (the “Prior Trustee”) to provide services to the trusts
established by the Company in connection with the Tasty Baking Company
Supplemental Executive Retirement Plan and the Tasty Baking Company Retirement
Plan for Directors (each a “Trust,” and collectively the
“Trusts”). The Prior Trustee has resigned effective December 31, 2006
and the Company has acted in accordance with the terms of each Trust agreement
to appoint SEI Private Trust Company (the “Trustee”) to provide services as
successor Trustee effective beginning January 1, 2007, and the Trustee is so
willing to serve the Trusts commencing on that date in accordance with the terms
of each Trust agreement.
This
letter is intended to clarify and direct the Trustee as to certain procedures
for administering the Trusts, as set forth below. Any capitalized
terms not otherwise defined herein shall have the same meaning as set forth in
the Trust agreements. The Trust administrative procedures shall be as
follows:
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1.
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Potential Change of
Control. In the event that the Company transfers assets
to the Trusts in connection with a Potential Change of Control, the
Trustee shall invest and reinvest the principal and income of the Trusts
and exercise the voting rights with respect to the assets of the Trusts
solely at the direction from the Company, or a properly appointed
investment manager, to the extent that the investment manager has such
authority. Discretionary authority for the management and
control of the assets from time to time held in Trusts may be retained,
allocated or delegated, as the case may be, for one or more purposes, by
the Company to and among an investment manager or investment
managers. The Trustee shall be fully protected in acting upon
any instruction it receives from the Company or a properly appointed
investment manager. If a Change of Control does not occur
within the time specified under the Trust agreements, the Company shall
provide the Trustee with written direction to liquidate the assets of the
Trusts, and return the proceeds of such liquidation to the
Company.
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0000
Xxxxxxx Xxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000-0000 Tel: (000)
000-0000
SEI
Private Trust Company
November
30, 2006
Page
2
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2.
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Change of
Control. In the event of an actual Change of Control,
the Company shall direct the Trustee to purchase an annuity with respect
to each Trust Beneficiary, pursuant to the terms of the Trust
agreement. Such annuities shall provide for a cash surrender
value. The Trustee may delegate the responsibility for securing
annuities in the marketplace to an affiliate of the Trustee, who may
receive a reasonable fee for the provision of services which shall be more
fully described at the time such annuity contracts are
purchased. The Company’s actuaries shall calculate and provide
to the Trustee the amount needed to purchase annuities to fund the
benefits due each Trust Beneficiary. Immediately prior to or upon the
Change of Control, the Company shall deliver to the Trustee a schedule
(the “Payment Schedule”) that indicates the amount payable in respect of
each Trust Beneficiary, the form in which such amount is to be paid and
the commencement date and frequency of such payments. The
Trustee will receive the payments from such annuity contracts, deposit
those payments into the applicable Trust and make such benefit payments
directly to the Trust Beneficiaries in accordance with the Payment
Schedule and the Trust agreement. The Company shall make
provision for the reporting and withholding of any federal, state or local
taxes that may be required to be withheld with respect to the payment of
benefits pursuant to the terms of the plans, and payment of amounts
withheld to the appropriate taxing
authorities.
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3.
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Insolvency. In
the event that the Trustee has actual knowledge that the Company is
Insolvent, and the Trustee has discontinued the payment of benefits to the
Trust Beneficiaries, the Trustee shall maintain intact any annuities held
by the Trusts unless and until it becomes necessary to surrender such
annuities to pay the claims of general creditors of the Company as
directed by a court of competent jurisdiction. If the Trustee
subsequently receives evidence satisfactory to it that the Company is not
Insolvent (or is no longer Insolvent), the Trustee will resume the payment
of benefits to the Trust Beneficiaries, if and to the extent assets are
available for distribution. The Company shall provide written
direction to the Trustee as to the amount of the first such payment due
(including any missed payments together with interest calculated pursuant
to the Trust agreements, less any amounts paid in lieu thereof by the
Company). To the extent that an annuity was surrendered due to
the Company’s Insolvency, the Trustee shall resume scheduled payments from
the proceeds thereof remaining in the Trust. The Trustee shall
inform the Company when such Trust assets have been depleted, and the
Company shall pay to the Trust Beneficiary the balance of any scheduled
payments as they fall due.
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4.
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Indemnification. If
Trustee undertakes or defends any litigation arising in connection with
the Trust, Company agrees to indemnify Trustee against Trustee’s costs,
expenses and liabilities (including, without limitation, reasonable
attorneys’ fees and expenses) relating thereto. If Company does
not pay such costs, expenses and liabilities in a reasonably timely
manner, Trustee may obtain payment from the assets of the Trust
itself. Trustee may consult with legal counsel (who may also be
counsel for Company generally) with respect to any of its duties or
obligations hereunder and the Trustee shall not be deemed imprudent by
reason of its taking or refraining from taking any action in accordance
with the opinion of counsel. The Company agrees, to the extent
permitted by law, to fully and forever indemnify and hold the Trustee
harmless from and against any claims, losses, damages, expenses and
liability that the Trustee may incur in the administration of the Trust,
unless arising from the Trustee’s own negligence and/or own willful breach
of the provisions of either the applicable Trust agreement or this letter,
provided however that the parties to this letter agree that in the
instance where the Trustee has been found merely (and not grossly)
negligent in the provision of services, damages shall be limited to one
(1) year’s worth of fees for services rendered by the
Trustee.
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SEI
Private Trust Company
November
30, 2006
Page
3
By
executing this letter, the Company and the Trustee each agree to the
administrative procedures set forth above. No alteration or variation
of these administrative procedures shall be valid unless in writing and
consented to by the Company and the Trustee.
Sincerely,
/s/Xxxxxx X.
Xxxxxxxxxx
Xxxxxx X.
Xxxxxxxxxx
Corporate
Treasurer
ACCEPTED
AND ACKNOWLEDGED BY:
SEI
PRIVATE TRUST COMPANY
By: /s/Xxxx
Xxxxxxx
Print: Xxxx
Xxxxxxx
Title: VP
Date: 11/29/06
