EXHIBIT 10-S
TRUST UNDER CONSULTING AGREEMENT FOR XXXX X. XXXXXX
This Agreement made this 31st day of July, 1995, by and between
GUARDSMAN PRODUCTS, INC. ("Company") and OLD KENT BANK ("Trustee").
WHEREAS, Company has entered into a Consulting Agreement with
Xxxx X. Xxxxxx, dated as of January 1, 1994, pursuant to which the Company
has agreed to defer compensation ("Plan");
WHEREAS, Company has incurred liability under the terms of such
Plan with respect to Xx. Xxxxxx:
WHEREAS, Company wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of Company's creditors in the event of Company's
Insolvency, as herein defined, until paid to Xx. Xxxxxx in such manner and
at such times as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded agreement and shall not affect the status of the
Plan as an unfunded plan maintained for the purpose of providing deferred
compensation 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
WHEREAS, it is the intention of Company to make contributions to
the Trust to provide itself with a source of funds to assist it in meeting
its liabilities under the Plan.
NOW, THEREFORE, the parties do hereby establish the Trust and
agree that the Trust shall be comprised, held, and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST.
(a) Company hereby deposits with Trustee in trust
$127,144.74, which shall become the principal of the Trust to be
held, administered, and disposed of by Trustee as provided in
this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which
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.
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(d) The principal of the Trust, and any earnings thereon,
shall be held separate and apart from other funds of Company and
shall be used exclusively for the uses and purposes of Plan
participants and general creditors as herein set forth. Plan
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 Plan and this Trust
Agreement shall be mere unsecured contractual rights of Plan
participants and their beneficiaries against Company. Any assets
held by the Trust will be subject to the claims of Company's
general creditors under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Within 30 days following each June 30 and December 31,
after the Trust has become irrevocable pursuant to Section 1(b)
hereof, Company shall be required to irrevocably deposit
additional cash or other property to the Trust in an amount
sufficient to pay each Plan participant or beneficiary the
benefits payable pursuant to the terms of the Plan as of each
such date.
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in respect
of each Plan participant (and his or her beneficiaries), that
provides a formula or other instructions acceptable to Trustee
for determining the amounts so payable, the form in which such
amount is to be paid (as provided for or available under the
Plan), and the time of commencement for payment of such amounts.
Except as otherwise provided herein, Trustee shall make payments
to the Plan participants and their beneficiaries in accordance
with such Payment Schedule. The Trustee shall make provision for
the reporting and withholding of any federal, state, or local
taxes that may be required to be withheld with respect to the
payment of benefits pursuant to the terms of the Plan and shall
pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld, and
paid by Company.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by
Company or such party as it shall designate under the Plan, and
any claim for such benefits shall be considered and reviewed
under the procedures set out in the Plan.
(c) Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the
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terms of this Plan. Company shall notify 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 Plan, Company shall make the balance of each such
payment as it falls due. Trustee shall notify Company where
principal and earnings are not sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is Insolvent.
Company shall be considered "Insolvent" for purposes of this
Trust Agreement if (i) Company is unable to pay its debts as they
become due, or (ii) Company is subject to a pending proceeding as
a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as
provided in Section 1(d) hereof, the principal and income of the
Trust shall be subject to claims of general creditors of Company
under federal and state law as set forth below.
(i) The Board of Directors and the Chief Executive
Officer of Company shall have the duty to inform Trustee in
writing of Company's Insolvency. If a person claiming to be
a creditor of Company alleges in writing to Trustee that
Company has become Insolvent, Trustee shall determine
whether Company is Insolvent and, pending such
determination, Trustee shall discontinue payment of benefits
to Plan participants or their beneficiaries.
(ii) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person
claiming to be a creditor alleging that Company is
Insolvent, Trustee shall have no duty to inquire whether
Company is Insolvent. Trustee may in all events rely on such
evidence concerning Company's solvency as may be furnished
to Trustee and that provides Trustee with a reasonable basis
for making a determination concerning Company's solvency.
(iii) If at any time Trustee has determined that
Company is Insolvent, Trustee shall discontinue payments to
Plan participants or their beneficiaries and shall hold the
assets of the Trust for the benefit of Company's general
creditors. Nothing in this Trust Agreement shall in any way
diminish any rights of Plan participants or their
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beneficiaries to pursue their rights as general creditors of
Company with respect to benefits due under the Plan or
otherwise.
(iv) Trustee shall resume the payment of benefits to
Plan participants or their beneficiaries in accordance with
Section 2 of this Trust Agreement only after Trustee has
determined that Company is not Insolvent (or is no longer
Insolvent).
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to
Section 3(b) hereof and subsequently resumes such payments, the
first payment following such discontinuance shall include the
aggregate amount of all payments due to Plan participants or
their beneficiaries under the terms of the Plan for the period of
such discontinuance, less the aggregate amount of any payments
made to Plan participants or their beneficiaries by Company in
lieu of the payments provided for hereunder during any such
period of discontinuance.
SECTION 4. PAYMENTS TO COMPANY. Except as provided in Section 3
hereof, after the Trust has become irrevocable, Company shall have no right
or power to direct Trustee to return to Company or to divert to others any
of the Trust assets before all payment of benefits have been made to Plan
participants and their beneficiaries pursuant to the terms of the Plan.
SECTION 5. INVESTMENT AUTHORITY.
(a) When directed by the Company, trustee shall invest in
or retain securities (including stock or rights to acquire stock)
or obligations issued by Company. The Company expressly waives
any diversification of investments that might otherwise be
necessary, or required under the laws of the State of Michigan,
or any other applicable state or federal law. All rights
associated with assets of the Trust shall be exercised by Trustee
or the person designated by Trustee, and shall in no event be
exercisable by or rest with Plan participants.
(b) The Trustee may invest and reinvest the issues of the
Trust as the Trustee, in its sole discretion, may deem
appropriate, including, without limitation, improved and
unimproved real property (whether or not income producing); other
common and preferred stocks; shares or certificates of
participation issued by investment companies; investment trusts
and mutual funds; common or pooled investment funds; bonds;
debentures; mortgages; deeds of trust; insurance and annuity
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contracts; notes secured by real or personal property; leases;
ground leases; limited partnership interests; real or personal
property interests owned, developed, or managed by joint ventures
or limited partnerships; obligations of governmental bodies, both
domestic and foreign; notes, commercial paper, certificates of
deposit, and other securities or evidences of indebtedness,
secured or unsecured, including variable amount notes,
convertible securities of all types and kinds, interest-bearing
savings or deposit accounts with any federally insured bank
(including the Trustee) or any federally insured savings and loan
association; and any other property permitted as trust
investments under applicable law. Such investment may also
include shares of investment companies to which Trustee or an
affiliate of Trustee serves as an investment advisor, dealer,
transfer agent, custodian, or has other business or contractual
relationship. The Trustee is authorized to invest in any common
or pooled investment fund or mutual fund now or hereafter
maintained or advised by the Trustee and any interest-bearing
savings or deposit accounts with the banking department of the
Trustee.
(c) Company shall have the right at anytime, 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 Company in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity.
SECTION 6. DISPOSITION OF INCOME. During the term of this Trust, all
income received by the Trust, net of expenses and taxes, shall be
accumulated and reinvested.
SECTION 7. ACCOUNTING BY TRUSTEE. 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 writing between Company and Trustee. Within 30 days
following the close of each calendar year and within 60 days after the
removal or resignation of Trustee, Trustee shall deliver to Company a
written account of its administration of the Trust during such year or
during the period from the close of the last preceding year to the date of
such removal or resignation, setting forth all investments, receipts,
disbursements, and other transactions effected by it, including a
description of all securities and investments purchased and sold with the
cost or net proceeds of such purchases or sales (accrued interest paid or
receivable being shown separately), and showing all cash, securities, and
other property held in the Trust at the end of such year or as of the date
of such removal or resignation, as the case may be.
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SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall act with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and
with like aims, provided, however, that Trustee shall incur no
liability to any person for any action taken pursuant to a
direction, request, or approval given by Company which is
contemplated by, and in conformity with, the terms of the Plan or
this Trust and is given in writing by Company. In the event of a
dispute between Company and a party, Trustee may apply to a court
of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising
in connection with this Trust, Company agrees to indemnify
Trustee against Trustee's costs, expenses, and liabilities
(including, without limitation, attorneys' fees and expenses)
relating thereto and to be primarily liable for such payments.
If Company does not pay such costs, expenses, and liabilities in
a reasonably timely manner, Trustee may obtain payment from the
Trust.
(c) Trustee may consult with legal counsel (who may also be
counsel for Company generally) with respect to any of its duties
or obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants, or other
professionals to assist it in performing any of its duties or
obligations hereunder.
(e) 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, 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 such
policy.
(f) Notwithstanding any powers granted to Trustee pursuant
to this Trust Agreement or to applicable law, 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.
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SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE. Company shall pay
all administrative and Trustee's fees and expenses. If not so paid, the
fees and expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to
Company, which shall be effective 30 days after receipt of such
notice unless Company and Trustee agree otherwise.
(b) Trustee may be removed by Company on 30 days' notice or
upon shorter notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment
of a successor Trustee, all assets shall subsequently be
transferred to the successor Trustee. The transfer shall be
completed within 60 days after receipt of notice of resignation,
removal, or transfer, unless Company extends the time limit.
(d) If Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective
date of resignation or removal under paragraphs (a) or (b) of
this section. If no such appointment has been made, Trustee may
apply to a court of competent jurisdiction for appointment of a
successor or for instructions. All expenses of Trustee in
connection with the proceeding shall be allowed as administrative
expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed in accordance with
Section 10(a) or (b) hereof, Company may appoint any third party,
such as a bank trust department or other party that may be
granted corporate trustee powers under state law, as a successor
to replace Trustee upon resignation or removal. The appointment
shall be effective when accepted in writing by the new Trustee,
who shall have all of the rights and powers of the former
Trustee, including ownership rights in the Trust assets. The
former Trustee shall execute any instruments necessary or
reasonably requested by 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 Sections 7 and 8 hereof. The successor
Trustee shall not be responsible for and Company shall indemnify
and defend the successor Trustee from any claim or liability
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resulting from any action or inaction of any prior Trustee or
from any other past event, or any condition existing at the time
it becomes successor Trustee.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written
instrument executed by Trustee and Company. Notwithstanding the
foregoing, no such amendment shall conflict with the terms of the
Plan or shall make the Trust revocable after it has become
irrevocable with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which
Plan participants and their beneficiaries are no longer entitled
to benefits pursuant to the terms of the Plan. Upon termination
of the Trust, any assets remaining in the Trust shall be returned
to Company.
(c) Upon written approval of participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the
Plan, Company may terminate this Trust prior to the time all
benefit payments under the Plan have been made. All assets in
the Trust at termination shall be returned to Company.
SECTION 13. MISCELLANEOUS.
(a) Any provisions of this Trust Agreement prohibited by
law shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
(b) Benefits payable to Plan 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.
(c) This Trust Agreement shall be governed by and construed
in accordance with the laws of Michigan.
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SECTION 14. EFFECTIVE DATE. The effective date of this Trust
Agreement shall be July 31, 1995.
GUARDSMAN PRODUCTS, INC.
By /S/XXXXXXX X. XXXXXXX
Its PRESIDENT AND CEO
Grantor
OLD KENT BANK
By /S/XXXXX X. XXXXX
Its VICE PRESIDENT
Trustee
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