EXHIBIT 10.10
EMPLOYMENT AGREEMENT
TRUST UNDER SAMARITAN PHARMACEUTICALS, INC.
DEFERRED COMPENSATION PLAN
SAMARITAN PHARMACEUTICALS, INC. ("Company") and ______________("Trustee") agree:
WHEREAS, Company has adopted a Deferred Compensation Plan ("Plan") for its
employees; and
WHEREAS, Company has incurred or expects to incur liability under the terms of
the Plan with respect to the individuals participating in the Plan; and
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 Plan participants and their beneficiaries in such manner and as
such times as specified in the Plan; and.
WHEREAS, it is the intention of the parties that this Trust shall constitute an
unfunded arrangement 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 the meeting of 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
1.1 Company hereby deposits or will deposit with Trustee in trust certain
amounts which shall become the principal of the Trust to be held, administered
and disposed of by Trustee as provided in this Trust Agreement.
1.2 The Trust hereby established is revocable by Company. It shall
become irrevocable upon a Change of Control, as defined herein.
1.3 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.
1.4 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 3.1.
1.5 Company, in its sole discretion, may at any time, or from time to time, make
additional deposits of cash or other property in trust with Trustee to augment
the principal to be held, administered and disposed of by Trustee as provided in
this Trust Agreement. Neither Trustee nor any Plan participant or beneficiary
shall have any right to compel such additional deposits.
1.6 Upon a Change of Control, Company shall, as soon as possible, but in no
event longer than forty-five (45) days following the Change of Control, as
defined herein, make an irrevocable contribution to the Trust in an amount that
is sufficient to pay each Plan participant or beneficiary the benefits to which
Plan participants or their beneficiaries would be entitled pursuant to the terms
of the Plan as of the date on which the Change of Control occurred.
Section 2: Payments to Plan Participants and Their Beneficiaries
2.1 Company shall deliver to Trustee a schedule (the "Payment Schedule") that
indicates the amounts payable in respect to 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 the Payment Schedule. 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.
2.2 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.
2.3 Company may make payment of benefits directly to Plan participants or their
beneficiaries as they become due under the terms of the 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 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
3.1 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.
3.2 At all times during the continuance of this Trust, as provided in Section
1.4, 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.
a. 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.
b. 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.
c. 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 beneficiaries to pursue their rights as general
creditors of Company with respect to benefits due under the Plan or otherwise.
d. 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).
3.3 Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3.2 and subsequently
resumes such payments, the first payment following the 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 the 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
4.1 Except as provided in Section 3, 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
5.1 Trustee may invest in securities (including stock or rights to acquire
stock) or obligations issued by Company. 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.
5.2 From and after the time the trust becomes irrevocable, 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 Company in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity.
Section 6: Disposition of Income
6.1 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
7.1 Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and other transactions required to be made, including
such specific records as shall be agreed upon in writing between Company and
Trustee. Within forty five (45) days following the close of each calendar year
and within forty five (45) 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 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 that year or as of the date of
removal or resignation, as the case may be.
Section 8: Responsibility of Trustee
8.1 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.
8.2 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.
8.3 Trustee may consult with legal counsel (who may also be counsel for Company
generally) with respect to any of its duties or obligations under this Trust.
8.4 Trustee may hire agents, accountants, actuaries, investment advisors,
financial consultants or other professionals to assist it in performing any of
its duties or obligations under this Trust.
8.5 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.
8.6 However, notwithstanding the provisions of Section 8.5, Trustee may loan to
Company the proceeds of any borrowing against an insurance policy held as an
asset of the Trust.
8.7 Notwithstanding any powers granted to Trustee pursuant to the 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.
Section 9: Compensation and Expenses of Trustee
9.1 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
10.1 Trustee may resign at any time by written notice to Company, which shall be
effective fifteen (15) days after receipt of such notice unless Company and
Trustee agree otherwise.
10.2 Trustee may be removed by Company with fifteen (15) days notice or upon
shorter notice accepted by Trustee.
10.3 Upon a Change of Control, as defined herein, Trustee may not be removed by
Company for twelve (12) months form the effective date of the Change of Control.
10.4 If funds are being held under Section 6.5(c) of the appropriate Employment
Agreement for any participant and if Trustee resigns or is removed within five
(5) years of a Change of Control, as defined herein, Trustee shall select a
successor Trustee, in accordance with the provisions of Section 11.2, prior to
the effective date of Trustee's resignation or removal.
10.5 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 thirty (30) days after receipt of notice
of resignation, removal or transfer, unless Company extends the time limit.
10.6 If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11, by the effective date of resignation or removal
under Sections 10.1 or 10.2. 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
11.1 If Trustee resigns or is removed in accordance with Sections 10.1 or 10.2,
Company may appoint any third party, such as a trust company, 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
instrument necessary or reasonably requested by Company or the successor Trustee
to evidence the transfer.
11.2 If Trustee resigns or is removed pursuant to the provisions of Section 10.4
and selects a successor Trustee, Trustee may appoint any third party such as a
bank trust department or other party that may be granted corporate trustee
powers under state law. The appointment of a successor Trustee shall be
effective when accepted in writing by the new Trustee. The new Trustee shall
have all the rights and powers of the former Trustee, including ownership rights
in Trust assets. The former Trustee shall execute any instrument necessary or
reasonably requested by the successor Trustee to evidence the transfer.
11.3 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. The successor Trustee shall not be responsible for, and Company shall
indemnify and defend the successor Trustee from, any claim or liability
resulting from any action or inaction of any prior Trustee or from any other
past event, or any condition existing at the time it becomes successor Trustee.
Section 12: Amendment or Termination
12.1 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 in accordance with Section 1.2.
12.2 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 unless sooner revoked in accordance with Section 1.2. Upon termination
of the Trust any assets remaining in the Trust shall be returned to Company.
12.3 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.
12.4 Section 10.3 of this Trust Agreement may not be amended by Company for
twelve (12) months following a Change of Control, as defined herein. Section
10.4 of this Trust Agreement may not be amended by Company for five (5) years
following a Change of Control, as defined herein.
Section 13: Miscellaneous
13.1 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.
13.2 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.
13.3 This Trust Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada.
13.4 For purposes of this Trust, Change of Control shall have the meaning
assigned by Section 6.3 of the individual Employment Agreements of participants
in the Plan.
Section 14: Effective Date
14.1 The effective date of this Trustee Agreement shall be April 1, 2001.
IN WITNESS WHEREOF, Grantor and Trustee have signed this Trust Agreement on the
dates indicated.
GRANTOR:
SAMARITAN PHARMACEUTICALS, INC. (Company)
By__________________________ Date___________________
Title
TRUSTEE:
____________________________ (Trustee)
By Date____________________
___________________________
Title
___________________________
