CATSKILL FINANCIAL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TRUST
THIS AGREEMENT (hereinafter referred to as the "Trust Agreement"), made
this 21st day of April , 1998 by and between CATSKILL FINANCIAL CORPORATION, a
corporation organized and existing under the laws of the State of Delaware (the
"Company") and having its principal offices at 000 Xxxx Xxxxxx, Xxxxxxxx, Xxx
Xxxx 00000, and the trustee identified on the signature page hereof (the
"Trustee"). Any reference herein to the "Bank" shall mean CATSKILL SAVINGS BANK,
a federally chartered stock savings bank.
W I T N E S S E T H:
WHEREAS, the Company has established the Catskill Financial Corporation
Supplemental Executive Retirement Plan (the "Plan") for the exclusive benefit of
certain management employees of the Company and designated affiliates; and
WHEREAS, the Trustee is not a party to the Plan and makes no
representations with respect thereto, and all representations and recitals with
respect to the Plan shall be deemed to be those of the Company; and
WHEREAS, the Company wishes to establish a trust (the "Trust") and to
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, as herein
defined, until paid to Plan participants and their beneficiaries in such manner
and at 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 any 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,
as amended ("ERISA"), if the Plan were "an employee benefit plan" subject to
ERISA;
WHEREAS, it is the intention of the 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, provided that the assets of the Trust shall
be subject to the claims of the Company's creditors in the event of the
Company's Insolvency, as herein defined, until paid to Plan participants and
their beneficiaries in the time and manner specified in 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) (i) The Company hereby deposits with Trustee in
trust $100, which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in this Trust Agreement.
(ii) The Trustee hereby accepts a trust
consisting of the initial deposit referred to in the preceding sentence and such
cash or other property acceptable to the Trustee as shall be paid or delivered
to the Trustee from time to time, together with the earnings, income, additions
and appreciation thereon and thereto (all of which is hereinafter called the
"Fund").
(b) The Trust hereby established shall be irrevocable. The
Company may, but shall not be required to, apply to the Internal Revenue Service
(the "IRS") for a Private Letter Ruling regarding the status of the Trust as a
"grantor trust" under sections 671 through 679 of the Internal Revenue Code of
1986, as amended (the "Code"), in accordance with Section 15 hereof. In the
event the Company makes such a request, it shall furnish to the Trustee a copy
of such Private Letter Ruling promptly upon the Company's receipt thereof.
(c) 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 Code, and shall be construed accordingly.
(d) 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 Plan participants and general
creditors as herein set forth. Plan participants and their beneficiaries shall
have no preferred claim on, nor 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 the Company. Any assets held by the Trust will be subject
to the claims of the Company's general creditors under federal and state law in
the event of Insolvency, as defined in Section 3 herein.
(e) The 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, or any other contribution to the Trust.
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(f) (i) Upon a Change of Control, the Company shall, as
soon as possible, but in no event later than 30 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.
(ii) Within 30 days following the end of the Plan
year(s) ending after the Trust has become irrevocable pursuant to Section 1(b),
the 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 the
close of such Plan year(s).
(iii) Any contribution required hereunder shall be
deemed sufficient if the aggregate of such contributions and the
other assets of the Fund, determined as of the date of the contributions, is at
least equal to the actuarially determined value of the aggregate benefits
accrued under the Plan, determined as of the same date. Any actuarial
determination required under the preceding sentence shall be made by the
Company, in its sole discretion.
(iv) The Trustee shall have the right and power, but
shall be under no duty, to determine whether the amount of any contribution is
in accordance with any Plan or to collect or enforce payment of any
contribution. The Trustee shall not be responsible for computing or collecting
any contribution or other amounts due under the Plan or the Trust.
SECTION 2
PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
(a) (i) The 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.
(ii) The Payment Schedule shall be delivered to the
Trustee following the execution of this Trust Agreement and an updated Payment
Schedule shall be furnished at least annually thereafter. Each such Payment
Schedule shall include, without limitation, (A) the names, addresses, dates of
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birth, social security numbers and the amount and form of accrued benefit of
each Plan participant and beneficiary in the Plan; (B) the amount and form of
projected benefits under the Plan of each participant and beneficiary, assuming
such participant would retire or die as of the last day of such calendar year;
(C) a schedule of the estimated yearly cash payments under the Plan; and (D) any
other information regarding the Plan which the Trustee may reasonably request.
(b) (i) To the extent that amounts are paid under this
Section 2 by the Trustee directly to any Plan participant or beneficiary, such
amounts shall be reduced by the Trustee in an amount equal to the income and
employment tax withholding required by law with respect to such participant or
beneficiary, as determined by the Company and promptly communicated to the
Trustee. The Trustee shall inform each Plan participant and beneficiary to whom
payment is made of the amount withheld from payment and the purpose of
withholding such amount. Such withheld amounts shall be paid by the Trustee to
the Company, which shall remit such withheld amounts to, and shall file the
appropriate withholding reports with, the appropriate governmental agencies. In
making any determination whether the Company has properly determined, reported
and/or withheld the appropriate taxes, the Trustee may rely on a written
certification, under penalties of perjury, signed by the Chief Executive Officer
of the Company or by another officer of the Company authorized by the Chief
Executive Officer to sign such certification in his behalf.
(ii) To the extent that amounts are paid under this
Section 2 by the Trustee directly to any Plan participant or beneficiary and the
Company fails to direct the Trustee with respect to the appropriate amount to be
withheld by the Trustee with respect to the applicable withholding requirements,
the Trustee shall use its best efforts to determine, in its sole discretion, the
appropriate amount of income and employment tax withholding required by law with
respect to the payment to such participant or beneficiary, and shall reduce any
payments by the amount of tax withholding required. The Trustee shall inform the
Company and each Plan participant and beneficiary to whom payment is made of the
amount withheld from payment and the purpose of withholding such amount. The
amount withheld by the Trustee shall be paid by the Trustee to the Company and
the Company shall remit such withheld amounts to, and shall file the appropriate
withholding reports with, the appropriate governmental agencies. Provided that
the Trustee has withheld the amounts directed by the Company or, in the absence
of such direction from the Company, used its best efforts to determine
applicable withholding under this Section, it shall have no liability for
failure to withhold amounts sufficient to meet applicable requirements, and
shall be held harmless by the Company against such liability.
(iii) Unless otherwise agreed to by the Trustee, the
Company shall be responsible for all tax information reporting with respect to
payments made to Plan participants and beneficiaries hereunder.
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(c) (i) The entitlement of a Plan participant or his or
her beneficiaries to benefits under the Plan shall be determined by the 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.
(ii) The Trustee shall have no authority over and no
responsibility for the disposition of claims for benefits under the Plan and, in
the absence of an order to the contrary of a court of competent jurisdiction,
may rely conclusively on the most recent Payment Schedule furnished to it by the
Company in making or refraining from making payments from the Trust to
individuals who are or purport to be Plan participants or their beneficiaries.
The Trustee shall not make payments hereunder to any person until it receives
instructions from the Company in a form reasonably satisfactory to the Trustee.
(d) (i) The Company may make payment of benefits
directly to Plan participants or their beneficiaries as they become due under
the terms of the Plan. The 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, the Company shall make the balance of
each such payment as it falls due. The Trustee shall notify the Company where
principal and earnings are not sufficient.
(ii) The Trustee shall have no liability or
responsibility for duplicate payments made prior to its receipt from the Company
of notice of the Company's intention to make direct payment.
(e) The Company may direct that payments be made before they
would otherwise be due if, based on a change in the federal tax or revenue laws,
a published ruling or similar announcement issued by the IRS, a regulation
issued by the Secretary of the Treasury, a decision by a court of competent
jurisdiction involving a participant or a beneficiary, or a closing agreement
made under Section 7121 of the Code that is approved by the IRS and involves a
participant or a beneficiary, it determines that a participant or beneficiary
has or will recognize income for federal income tax purposes with respect to
amounts that are or will be payable under the Plan before they are to be paid.
SECTION 3
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY
WHEN THE COMPANY IS INSOLVENT
(a) (i) The Trustee shall cease payment of benefits to
Plan participants and their beneficiaries if the Company is Insolvent. The
Company shall be considered "Insolvent" for purposes of this Trust Agreement if
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(A) the Company is unable to pay its debts as they become due, (B) the Company
is subject to a pending proceeding as a debtor under the United States
Bankruptcy Code or the equivalent thereof or (C) the Company is subject to an
order or regulation issued pursuant to section 18(k) of the Federal Deposit
Insurance Act, as amended, prohibiting payments from the Plan.
(ii) For purposes of this Trust Agreement, a
condition which results in the Company's being Insolvent shall be
referred to as the Company's "Insolvency."
(iii) While the Company is Insolvent, the Trustee
shall make payments from the Trust only to or for the benefit of the
Company's general creditors and only upon the direction of a court of competent
jurisdiction or, in the event that a trustee, receiver, conservator or other
similar official shall be appointed to oversee the Company's affairs during a
period of Insolvency, upon the direction of such trustee, receiver, conservator
or other similar official.
(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 the Company under federal and state
law as set forth below.
(i) The Board of Directors and the Chief Executive
Officer of the Company shall have the duty to inform Trustee in writing of the
Company's Insolvency. If a person claiming to be a creditor of the Company
alleges in writing to Trustee that the Company has become Insolvent, Trustee
shall determine whether the Company is Insolvent and, pending such
determination, Trustee shall discontinue payment of benefits to Plan
participants or their beneficiaries.
(ii) (A) Unless Trustee has actual knowledge of
the Company's Insolvency, or has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent, Trustee shall
have no duty to inquire whether the Company is Insolvent. Trustee may in all
events rely on such evidence concerning the Company's solvency as may be
furnished to Trustee and that provides Trustee with a reasonable basis for
making a determination concerning the Company's solvency.
(B) The Trustee shall be deemed to have a
reasonable basis for determining that the Company is Insolvent if it has
received (1) a certified copy of a bankruptcy or insolvency petition with
respect to the Company or a general assignment by the Company for the benefit of
its creditors, (2) a Certificate of Commencement of Case (or similar document)
acknowledging either (aa) that a petition for the commencement of a voluntary or
involuntary case pursuant to Titles 7 or 11 of the United States Bankruptcy
Code, as amended, was duly filed by or against the Company with the United
States Bankruptcy Court, or (bb) the taking of possession of the Company of all
or substantially all of its assets by a receiver, custodian, trustee or similar
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official, (3) a certified copy of an order pursuant to section 18(k) of the
Federal Deposit Insurance Act, as amended, prohibiting payments pursuant to the
Plan ("Regulatory Order"), or (4) a written certification, under penalties of
perjury, signed by the Chief Executive Officer of the Company or a majority of
the members of the Board, that the Company is Insolvent.
(iii) If at any time the Trustee has determined that
the 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 the 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 the Company with
respect to benefits due under the Plan or otherwise.
(iv) (A) The Trustee shall resume the payment of
benefits to Plan participants or their beneficiaries in accordance with Section
2 hereof only after Trustee has determined that the Company is not Insolvent (or
is no longer Insolvent).
(B) The Trustee shall be deemed to have a
reasonable basis for determining that the Company is no longer Insolvent if it
has received: (1) a judgement, decree or order of a court of competent
jurisdiction dismissing a case filed with respect to the Company under Title 7
or 11 of the United States Bankruptcy Code; or (2) a judgement, decree or order
of a court of competent jurisdiction overturning a Regulatory Order; or (3) if
the Trustee determined the Company to be Insolvent based on a certification of
the Chief Executive Officer or the Board, a subsequent written certification,
under penalties of perjury, signed by the Chief Executive Officer of the Company
or a majority of the members of the Board that the Company is no longer
insolvent.
(v) The Board and Chief Executive Officer of the
Company shall certify to the Trustee, at the Trustee's request, whether the
Company is Insolvent. Any such certification may be requested by the Trustee
from time to time and at any time, and shall be made promptly by the Board or
Chief Executive Officer under the penalties of perjury. Any certification
received by the Trustee under this subparagraph shall also be deemed a
reasonable basis from the Trustee's determination of Insolvency under this
Section 3.
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust pursuant to this Section 3
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 the Company in lieu of the payments
provided for hereunder during any such period of discontinuance. The Trustee
shall have an obligation to offset payments hereunder by direct payments made to
Plan participants and their beneficiaries by the Company during the period of
discontinuance described in the preceding sentence only to the extent the
Company directs the Trustee to make such offset.
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SECTION 4
PAYMENTS TO THE COMPANY
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, the Company shall have no right or power to direct Trustee to
return to the Company or to divert to others any of the Trust assets before all
payments of benefits have been made to Plan participants and their beneficiaries
pursuant to the terms of the Plan.
SECTION 5
INVESTMENT AUTHORITY
(a) Subject to subsections (b) and (c) of this Section 5, the
Trustee shall have exclusive authority and discretion to manage and control the
assets of the Fund as specified in this Section 5, and pursuant to such
authority and discretion may exercise from time to time and at any time the
power:
(i) To invest and reinvest the Fund, without
distinction between principal and income, in the group, family or class of
mutual funds or other securities specified in writing by the Company which shall
constitute the exclusive permitted investments of the Fund;
(ii) To exercise, personally or by general or
limited proxy, the right to vote any securities held in the Fund; and to
exercise, personally or by power of attorney, any other right appurtenant to
securities held by the Fund;
(iii) To exercise or sell any conversion or
subscription or other rights appurtenant to any securities held in the Fund;
(iv) To invest and reinvest any property, real or
personal, in the Fund in any other form or type of investment not specifically
mentioned in this subsection (a), so long as such form or type of investment is
a form or type of investment approved by the Chief Financial Officer or Chief
Executive Officer of the Company and a direction is made by the Company to
invest in such property.
(b) (i) The Trustee may invest in securities
(including stock or rights to acquire stock) or obligations issued by the
Company or the Bank. All rights associated with assets of the Trust shall be
exercised by the Trustee or the person designated by the Trustee, and shall in
no event be exercisable by or rest with Plan participants except that voting,
tender, appraisal, dissenter and other similar rights with respect to Trust
assets shall be exercised by the Company. In the absence of timely directions
8
from the Company, the Trustee shall have no duty to exercise such rights, and
shall have no liability for refraining from exercising such rights.
(ii) Any investment by the Trustee in securities
or obligations of the Company or the Bank shall be subject to prior written
approval of the Company.
(iii) The 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 the
Company in a nonfiduciary capacity without the approval or consent of any person
in a fiduciary capacity.
(c) The Trustee shall exercise its powers under this Section 5
in a manner consistent with such direction by the Company and shall have no
liability whatsoever for any loss, cost or expense occasioned by any investment
in accordance with this section.
(d) To the extent permitted by law, the Trustee shall not be
liable for any act or omission of the Company hereunder and, except as set forth
hereunder, the Trustee shall not be under any obligations to invest or otherwise
manage the assets of the Plan. Without limiting the generality of the foregoing,
the Trustee shall not be liable by reason of its taking or refraining from
taking any action hereunder at the direction of the Company; the Trustee shall
be under no duty to question or to make inquiries as to any direction or order
or failure to give direction or order by the Company and the Trustee shall be
under no duty to make any review of investments acquired for the Fund at the
direction or order of the Company and shall be under no duty at any time to make
any recommendation with respect to disposing of or continuing to retain any such
investment.
(e) Without limiting the generality of the provisions of
Section 8 hereof, the Company agrees, to the extent permitted by law, to
indemnify the Trustee and hold it harmless from an against any claim or
liability that may be asserted against it, otherwise than on account of the
Trustee's own gross negligence or willful misconduct or violation of any
provision of law, by reason of the Trustee's taking or refraining from taking
any action in accordance with this Section 5.
(f) Subject to the other provisions of this Trust Agreement,
the Trustee shall have the power and authority to be exercised in its sole
discretion at any time and from time to time to issue and place orders for the
purchase or sale of securities directly with qualified brokers or dealers. Such
orders may be placed with such qualified brokers and/or dealers who also provide
investment information or other research or statistical services to the Trustee
in its capacity as a fiduciary or investment manager for other clients.
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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
ACCOUNTS
(a) (i) The Trustee shall keep accurate and detailed
records of all receipts, investments and disbursements under this Agreement.
Such person or persons as the Company shall designate shall be allowed to
inspect the books of account relating to the Fund upon request at any reasonable
time during the business hours of the Trustee
(ii) Within 120 days after the close of each
calendar year, Trustee shall transmit to the Company, and certify the accuracy
of, a written statement of the assets and liabilities of the Fund at the close
of that calendar year, showing the current value of each asset at that date, and
a written account of all the Trustee's transactions relating to the Fund during
the period from the last previous accounting to the close of that calendar year.
(For purposes of this section, the date of the Trustee's resignation or removal
as provided in Section 10 hereof or the date of the termination of the Plan as
provided in Section 11 hereof shall be deemed to be the close of a calendar year
with respect to the Trustee's resignation or the terminated Plan, as the case
may be).
(iii) Unless the Company shall have filed with the
Trustee written exceptions or objections to any such statement or account within
180 days after receipt thereof, the Company shall be deemed to have approved
such statement and account; and in such case, or upon the written approval by
the Company of any such statement and account, the Trustee shall be forever
released and discharged with respect to all matters and things expressly set
forth in such statement and account as though it had been settled by decree of a
court of competent jurisdiction in an action or proceeding to which the Company
and all persons having any beneficial interest in the Fund were parties.
(b) Nothing contained in this Agreement or in the Plan shall
deprive the Trustee of the right to have judicial settlement of its accounts. In
any proceeding for a judicial settlement of the Trustee's accounts, or for
instructions in connection with the Fund, the only other necessary party thereto
in addition to the Trustee shall be the Company. If the Trustee so elects, it
may bring in as a party or parties defendant any other person or persons. No
person interested in the Fund, other than the Company, shall have the right to
compel an accounting, judicial or otherwise, by the Trustee, and each such
person shall be bound by all accountings by the Trustee to the Company, as
10
herein provided, as if the account had been settled by decree of a court of
competent jurisdiction in an action or proceeding to which such person was a
party.
SECTION 8
RESPONSIBILITY OF TRUSTEE
(a) The Trustee shall discharge its duties under this
Agreement 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 Plan or this Agreement and is given in writing by the Company. The duties
and obligations of the Trustee shall be limited to those expressly imposed upon
it by this Agreement, notwithstanding any reference herein to the Plan.
(b) The Trustee shall have no duty to commence or defend any
legal action arising in connection with the Trust unless it shall first have
been indemnified, in manner and substance satisfactory to it, against its costs,
expenses and liabilities (including, without limitation, attorneys' fees and
expenses) relating thereto.
(c) The Trustee may consult with counsel, who may be counsel
for the Company or for the Trustee in its individual capacity, and shall not be
liable for any actions taken or omitted in accordance with the opinion of
counsel. The Company agrees, to the extent permitted by law, to indemnify and
hold the Trustee harmless from and against any liability that it may incur in
connection with the Fund, unless arising from the Trustee's own grossly
negligent or willful breach of the provisions of Section 8(a). The Trustee shall
not be required to give any bond or other security for the faithful performance
of its duties under this Agreement, except as required by law. The Trustee, in
its corporate capacity, shall not be liable for claims of any persons in any
manner regarding the Plan; such claims shall be limited to the Trust Fund.
(d) (i) 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, 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.
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(ii) The Trustee shall have, and in its sole and
absolute discretion may exercise from time to time and at any time, the
following administrative powers and authority with respect to the Fund
consistent with the provisions of Section 5:
(A) To continue to hold any property of the
Fund whether or not productive of income; to reserve from investment and keep
unproductive of income, without liability for interest, cash temporarily
awaiting investment and such cash as it deems advisable or as the Company from
time to time may specify in order to meet the administrative expenses of the
Fund or anticipated distributions therefrom;
(B) To hold property of the Fund in its own
name or in the name of a nominee or nominees, without disclosure of the Trust,
or in bearer form so that it will pass by delivery, but no such holding shall
relieve the Trustee of its responsibility for the safe custody of the Fund in
accordance with the provisions of the Agreement; the Trustee's books and records
shall at all times show that such property is part of the Fund; and, subject to
Section 8(c), the Trustee shall be absolutely liable for any loss occasioned by
the acts of its nominee or nominees with respect to the securities registered in
the name of the nominee or nominees;
(C) To employ in the management of the Fund
suitable agents, without liability for any loss occasioned by any such agents
selected by the Trustee 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.
(D) To do all other acts that the Trustee
may deem necessary or proper to carry out any of the powers set forth in Section
5 hereof or otherwise in the best interests of the Fund.
(e) 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 Code.
(f) Unless the Trustee participates knowingly in, or knowingly
undertakes to conceal, an act or omission of the Company or any other fiduciary,
knowing such act or omission to be a breach of fiduciary responsibility, the
Trustee shall be under no liability for any loss of any kind which may result by
reason of such act or omission.
(g) If a dispute arises as to the payment of any funds or
delivery of any assets by the Trustee, the Trustee may withhold such payment or
delivery until the dispute is determined by a court of competent jurisdiction or
finally settled in writing by the parties concerned.
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SECTION 9
TAXES, COMPENSATION AND EXPENSES OF TRUSTEE
(a) (i) The Company shall pay any Federal, state,
local or other taxes imposed or levied with respect to the corpus and/or income
of the Fund or any part thereof under existing or future laws
(ii) All taxes that may be levied or assessed
upon, or in respect of, the Fund shall be paid from the Fund. The Trustee shall
notify the Company of any proposed or final assessments of taxes and may assume
that any such taxes are lawfully levied or assessed, unless the Company advises
it in writing to the contrary within 15 days after receiving the above notice
from the Trustee. In such case, the Trustee, if requested by the Company in
writing, shall contest the validity of such taxes in any manner deemed
appropriate by the Company; the Company may itself contest the validity of any
such taxes, in which case the Company shall so notify the Trustee and the
Trustee shall have no responsibility or liability respecting such contest. If
either party to this Agreement contests any such proposed levy or assessments,
the other party shall provide such information and cooperation as the party
conducting the contest shall reasonably request.
(b) The Trustee, without direction from the Company, shall pay
from the Fund from time to time such reasonable compensation for its services as
trustee as shall be agreed upon with the Company, the reasonable and necessary
expenses and compensation of counsel and other agents employed or engaged by the
Trustee pursuant to Section 8(d)(ii)(C) and all other reasonable and necessary
expenses of managing and administering the Fund (which the Trustee, in its
discretion, determines to be necessary or appropriate) that are not paid by the
Company.
SECTION 10
RESIGNATION AND REMOVAL OF TRUSTEE
(a) The Trustee may resign at any time by written notice to
the Company, which shall be effective 60 days after receipt of such notice
unless the Company and the Trustee agree otherwise.
(b) The Company, by action of its Board, may remove the
Trustee at any time upon 60 days written notice, or upon shorter notice if
acceptable to the Trustee. In the event it resigns or is removed, the Trustee
shall have a right to have its accounts settled as provided in Section 7 hereof.
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(c) (i) 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 the Company extends the
time limit.
(ii) The Trustee may reserve such sums as the
Trustee shall deem necessary to defray its expenses in settling its accounts, to
pay any of its compensation due and unpaid and to discharge any obligation of
the Fund for which the Trustee may be liable. If the sums so reserved are not
sufficient for these purposes, the Trustee shall be entitled to recover the
amount of any deficiency from either the Company or the successor Trustee, or
both. When the Fund shall have been transferred and delivered to the successor
Trustee and the accounts of the Trustee have been settled as provided in Section
7 hereof, the Trustee shall be released and discharged from all further
accountability or liability for the Fund and shall not be responsible in any way
for the further disposition of the Fund or any part thereof.
(d) (i) 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 subsection (b) above. 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 incurred in connection with the proceeding shall be allowed as
administrative expenses of the Trust.
(ii) Each successor trustee shall have all the
powers and duties conferred upon the Trustee in this Trust Agreement and
"Trustee", as used in this Agreement, shall be deemed to include any successor
Trustee.
SECTION 11
APPOINTMENT OF SUCCESSOR
In the event of the resignation or removal of the Trustee, a
successor Trustee shall be appointed by the Company. Such appointment shall take
effect upon delivery to the Trustee of an instrument so appointing the successor
and an instrument of acceptance executed by such successor, both of which
instruments shall be duly acknowledged by a notary public. The delivery of such
instruments shall take place within sixty (60) days after notice of resignation
or removal, as applicable, of the Trustee shall have been given.
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SECTION 12
AMENDMENT OR TERMINATION
(a) This Trust Agreement may be amended by a written
instrument duly executed and acknowledged by the Trustee and the 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(b) hereof.
(b) (i) 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 the Company.
(ii) Notwithstanding the foregoing, if not
sooner terminated, the Trust shall terminate automatically on the twenty-first
(21st) anniversary of the death of the last to die of all of the lineal
descendants of Xxxx Xxxxxxxxxx Xxxxxxx, daughter of Xxxx Xxxxxxx Xxxxxxxxxx and
Xxxxxxxxx Xxxx Xxxxxx Xxxxxxxxxx, who are living and in being on the effective
date of this Trust Agreement.
(iii) Notwithstanding the foregoing, until the
Trust has become irrevocable as provided in Section 1(b) hereof, the Trust may
be terminated at any time by the Company.
(iv) In case the Plan is terminated, in whole or
in part, the Trustee (subject to the provisions of Sections 10 and 11 hereof and
reserving such sums as the Trustee shall deem necessary in settling its accounts
and to discharge any obligation of the Fund for which the Trustee may be liable)
shall apply and distribute any subfund attributable to such terminating Plan in
accordance with the written directions of the Company. Upon such termination of
the Plan in whole or in part, the Trustee shall have a right to have its
accounts settled as provided in Section 7 hereof. When a subfund shall have been
so applied or distributed and the accounts of the Trustee shall have been so
settled, the Trustee shall be released and discharged from all further
accountability or liability respecting such subfund, and shall not be
responsible in any way for the further disposition of such subfund.
15
SECTION 13
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) 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) (i) This Trust Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts to be performed wholly within the State of New York.
(ii) Nothing in this Agreement shall be construed to
subject either the Trust created hereunder or the Plan to ERISA.
(iii) Any reference herein to ERISA or the Code shall
include such law as in effect on the effective date hereof, subsequent amendment
thereto and any succeeding law.
(d) The titles to Sections of this Agreement are placed herein
for convenience of reference only, and the Agreement is not to be construed by
reference thereto.
(e) This Agreement shall bind and inure to the benefit of the
successors and assigns of the Company and the Trustee, respectively.
(f) This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute but one instrument, which may be sufficiently evidenced by any
counterpart executed by all parties hereto.
(g) Any corporation into which the Trustee is merged with or
with which it is consolidated, or any corporation resulting from a merger,
reorganization or consolidation, to which the Trustee is a party, or any
corporation to which all or substantially all the trust business of the Trustee
is transferred shall become the successor trustee under the Agreement without
the execution or filing of any further instrument or the performance of any
further act.
16
(h) The Company or anyone acting on its behalf may at any time
employ the Trustee in its corporate (and not its fiduciary) capacity as agent to
perform any act, keep any records or accounts, or make any computations required
by the Company. Any such agency relationship shall be established by a separate
agreement between the Company and the Trustee, and the existence of such
agreement and any actions performed by the Trustee under such agreement shall
not affect its responsibilities as Trustee under this Agreement.
SECTION 14
ADMINISTRATION OF THE PLAN; COMMUNICATIONS
(a) The Company shall administer the Plan as provided therein,
and the Trustee shall not be responsible in any respect for administering such
Plan nor shall the Trustee be responsible for the adequacy of the Fund to meet
and discharge all payments and liabilities under such Plan. The Trustee shall be
fully protected in relying upon any written notice, instruction, direction or
other communication signed by an officer of the Company duly authorized to give
communications to the Trustee. The Company from time to time shall furnish the
Trustee with the names and specimen signatures of such duly authorized officers
of the Company and shall promptly notify the Trustee of the termination of
office of any officer of the Company and the appointment of a successor thereto.
Until notified to the contrary, the Trustee shall be fully protected in relying
upon the most recent list of duly authorized officers of the Company furnished
to it by the Company.
(b) Any action required by any provision of this Agreement to
be taken by the Board shall be evidenced by a resolution of the Board, certified
to the Trustee by the Secretary or an Assistant Secretary of the Company under
its corporate seal. The Trustee shall be fully protected in relying upon any
resolution so certified to it. Unless other evidence with respect thereto has
been specifically prescribed in this Agreement, any other action of the Company
under any provision of this Agreement, including any approval of or exceptions
to the Trustee's accounts, shall be evidenced by a certificate signed by an
officer of the Company, duly authorized to give communications to the Trustee,
and the Trustee shall be fully protected in relying upon such certificate. The
Trustee may accept a certificate signed by an officer of the Company duly
authorized to give communications to the Trustee as proof of any fact or matter
that it deems necessary or desirable to have established in the administration
of the Trust (unless other evidence of such fact or matter is expressly
prescribed herein), and the Trustee shall be fully protected in relying upon the
statements in the certificate.
(c) Notwithstanding anything herein contained to the contrary,
the Trustee shall be entitled conclusively to rely upon any written notice,
instruction, direction, certificate or other communication reasonably believed
by it to be genuine and to be signed by the proper person or persons, and the
17
Trustee shall be under no duty to make investigation or inquiry as to the truth
or accuracy of any statement contained therein.
(d) Until notice be given to the contrary, communications to
the Trustee shall be sent to it at its office at
___________________________________ Attention: ___________________;
communications to the Company shall be sent to it at its office at 000 Xxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 Attention: Xxxxxx X. Xxxxx, CEO.
SECTION 15
IRS RULING
The Company may apply for a Private Letter Ruling from the IRS with
respect to the federal income tax consequences of the Trust. If the IRS,
following a request by the Company, declines to issue a favorable ruling to the
effect that the Company will be treated for Federal income tax purposes as the
owner of the Fund pursuant to Sections 671 through 679 of the Code, that the
income of the Fund will be treated as income of the Company, and that the
funding of, and realization of income by, the Fund will not result in income to
the participants or beneficiaries prior to the date that such funds are actually
distributed or made available to participants or beneficiaries hereunder, all of
the assets then held in the Fund shall forthwith be returned to the Company in
kind and this Agreement shall be null and void and have no force and effect.
18
SECTION 16
DEFINITION OF CHANGE OF CONTROL
(a) "Change of Control" shall have the same meaning under this
Trust as defined in the Company's employee stock ownership plan.
(b) The Trustee shall not be responsible for determining
whether a Change of Control occurs. Such determination shall be made solely by
the Company, and the Company shall promptly notify the Trustee in writing in
such an event. The Company shall, under the penalties of perjury, promptly
certify to the Trustee at any time, and from time to time, at the Trustee's
request, whether a Change of Control has been deemed to have occurred. The
Trustee shall be fully protected in relying upon such certification, and the
Company shall indemnify Trustee for any act or omission taken pursuant to such
certification.
SECTION 17
EFFECTIVE DATE
The effective date of this Trust Agreement shall be April 1, 1998.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective names by their duly authorized officers under their
corporate seals as of the day and year first above written.
CATSKILL FINANCIAL CORP.
By: /s/ Xxxxx X. Xxxxxxxxxxx
------------------------------------
As its: VP/Secretary
/s/ Xxxxx X. Xxxx
------------------------------------
Xxxxx X. Xxxx, Trustee
/s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx, Trustee
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxx, Xxxxxxx
00
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF XXXXXX )
On this 21st day of May , 1998, before me personally came Xxxxx X.
Xxxxxxxxxxx , to me known, who, being by me duly sworn, did depose and say that
he resides at Wildwing Pk. Catskill, NY, that he is the VP/Secretary of the
CATSKILL FINANCIAL CORPORATION, the company described in and which executed the
foregoing instrument; that he knows the seal of said company; that the seal
affixed to said instrument is such company's seal; that it was so affixed by
order of the Board of Directors of said company; and that he signed his name
thereto by like order.
/s/ Xxxxxx Xxxxx
-----------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF XXXXXX )
On this 19th day of May , 1998, before me personally came XXXXX X.
XXXX, to me known, who, being by me duly sworn, did depose and say that he
resides at Abeel Dr. Catskill, NY , and that he executed the foregoing
instrument as a Trustee.
/s/ Xxxxx X. Xxxxxxxxxxx
-----------------------------------
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF ALBANY )
On this 21st day of May , 1998, before me personally came XXXXXX X.
XXXXXXX, to me known, who, being by me duly sworn, did depose and say that he
resides at Catskill, NY , and that he executed the foregoing instrument as a
Trustee.
/s/ Xxxx X. Xxxxxxxx
-----------------------------------
Notary Public
00
XXXXX XX XXX XXXX )
: ss.:
COUNTY OF ALBANY )
On this 21st day of May , 1998, before me personally came XXXXXXX X.
XXXXXXXX, to me known, who, being by me duly sworn, did depose and say that he
resides at Delmar, NY , and that he executed the foregoing instrument as a
Trustee.
/s/ Xxxx X. Xxxxxxxx
-----------------------------------
Notary Public
21
