EXHIBIT 4.4
DIRECTED EMPLOYEE
BENEFIT TRUST AGREEMENT
DIRECTED EMPLOYEE BENEFIT TRUST AGREEMENT
This TRUST AGREEMENT ("Trust Agreement" or "Agreement"), entered into this
16th day of November, 1994, by and between XXXXXX SAVINGS AND LOAN ASSOCIATION,
a California corporation, partnership or sole proprietorship (the "Company"),
and THE XXXXXXX XXXXXX TRUST COMPANY (the "Trustee").
PURPOSE
The Company has adopted a plan called Xxxxxx Savings and Loan Association
Employees' Retirement and Savings Plan (the "Plan") for the exclusive purpose of
providing benefits to certain of its employees and their beneficiaries and
defraying reasonable expenses of administering the Plan. The Plan provides that,
from time to time, cash and other assets may be paid to the Trustee by the
Company to be held and administered as a trust (the "Trust Fund" or "Trust") for
the uses and purposes of the Plan. The Company intends that the Plan shall
qualify under section 401 of the Internal Revenue Code of 1986, as amended (the
"Code"), and that the Trust shall constitute a part of the Plan, as a tax exempt
entity within the meaning of Code section 501(a).
Subject to specific conditions set forth in this Agreement, the Trustee
agrees that it will hold in the Trust and invest cash and other acceptable
property received pursuant to this Agreement and received as contributions from
the Company or transfers from another plan qualified under section 401(a) of the
Code upon the terms and conditions stated below.
ARTICLE I-TRUST FUND
1.1 The Company's President or other duly authorized official shall certify
in writing to the Trustee the names and specimen signatures of all those persons
who are authorized to act as or on behalf of the Plan's named fiduciary, which
term shall include the administrator of the Plan (the "Administrator") and these
names and specimen signatures shall be updated as necessary by the President or
other duly authorized official.
1.2 All contributions or transfers shall be received by the Trustee in cash
or in any other property acceptable to the Trustee as determined by the Trustee
under its Investment Guidelines, which are incorporated herein and made part of
the Agreement as amended from time to time. The Trust Fund shall consist of the
contributions and transfers received by the Trustee, together with the income
and earnings from them and any increments to them. The Trustee shall manage and
administer the Trust Fund without distinction between principal and income. The
Trustee shall have no duty to (i) compute any amount required to be transferred
or paid to it by the Company, (ii) collect any contributions or transfers to the
Trust Fund, or (iii) determine whether any contribution or transfer complies
with the terms of the Plan.
If the Company creates or maintains one or more employee benefit plans
qualified under Code section 401(a) in addition to the Plan, the Company may
request the Trustee to hold the assets of the additional plan or plans in the
Trust Fund. The Administrator shall keep records showing the interest of the
Plan and each additional plan in the Trust Fund unless the Trustee enters into
an agreement with the Company to keep separate accounts for each such plan. The
Company and the Administrator shall not permit or cause the assets of one plan
to be used to pay benefits or the administrative expenses of any other plan with
the assets in the Trust Fund.
1.3 The Trustee shall accept a contribution of cash or other property
otherwise acceptable to the Trustee that has been distributed to a participant
(or an eligible employee who is about to become a participant) from another
employee benefit plan qualified under Code section 401(a), or from an individual
retirement account or annuity described in Code section 408, at the direction of
the
Administrator. The Administrator shall be solely responsible for determining
that such assets represent an eligible rollover contribution within the meaning
of Code section 402(a)(5) or 408(d)(3). The Trustee shall accept a transfer of
cash or other property acceptable to the Trustee on behalf of a participant (or
an employee who is about to become a participant) directly from the trustee of
an employee benefit plan qualified under Code section 401(a) at the direction of
the Administrator.
ARTICLE II-INVESTMENTS AND DISTRIBUTIONS
2.1 (a) Except as provided below, the Administrator shall have all power
over and responsibility for the management, disposition, and investment of the
Trust assets, and the Trustee shall comply with proper written directions of the
Administrator concerning those assets. The Administrator shall not issue
directions in violation of the terms of the Plan and Trust or prohibited by the
fiduciary responsibility rules of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). Except to the extent required by ERISA or otherwise
provided in this Agreement, the Trustee shall have no duty or responsibility to
review, initiate action, or make recommendations regarding Trust assets and
shall retain assets until directed in writing by the Administrator to dispose of
them.
The Administrator may delegate to any other person or persons any of the
Administrator's rights, powers or responsibilities with respect to the operation
and administration of the Trust Fund. Any such delegation shall be made in
writing and communicated to the Trustee. The Administrator shall not be liable
for any breach of fiduciary responsibility of a delegee that is not proximately
caused by the Administrator's failure to properly select or supervise such
delegee and in which the Administrator does not participate.
(b) If permissible under the Plan, each participant and/or beneficiary may
have investment power over the account maintained for him or her, and may direct
the investment and reinvestment of assets of the account among the options
authorized by the Administrator. Such direction shall be furnished to the
Trustee in writing or otherwise as agreed by the Trustee and the Administrator.
Such direction shall be furnished to the Trustee in writing or otherwise as
agreed by the Trustee and the Administrator. To the extent provided under ERISA
section 404(c), the Trustee shall not be liable for any loss, or by reason of
any breach, which results from such participant's or beneficiary's exercise of
control. If a participant who has investment authority under the terms of the
Plan fails to provide such directions, the Administrator shall direct the
investment of the participant's account. The Administrator shall maintain
records showing the interest of each participant and/or beneficiary in the Trust
Fund unless the Trustee enters into an agreement with the Company to keep
separate accounts for each such participant and/or beneficiary. The Trustee
shall have no duty or responsibility to review or make recommendations regarding
investments made at the direction of the Administrator or participant and shall
be required to act only upon receipt of proper written directions. A participant
or beneficiary shall not have authority to direct the investment of assets in
his or her account in a loan to any participant, including himself or herself,
or "collectibles" within the meaning of Code section 408(m)(2).
(c) The Administrator may appoint an investment manager or managers within
the meaning of section 3(38) of ERISA to direct, control or manage the
investment of all or a portion of the Trust assets, as provided in sections
3(38) and 403(a)(2) of ERISA. The Administrator shall notify the Trustee in
writing of the appointment of each investment manager, and the assets over which
each manager shall exercise control and cause the investment manager to
acknowledge to the Trustee in writing that the investment manager is a fiduciary
with respect to the Plan. If the foregoing conditions are met, the investment
manager shall have the power to manage, acquire, or dispose of any Trust assets
identified as under such manager's control, and the Trustee shall not be liable
for acts or omissions of the investment manager, or be under an obligation to
invest or otherwise manage any asset of the Trust that is subject to the
management of such investment manager. The Trustee shall act only upon receipt
of proper written directions from a duly appointed investment manager, and shall
have no liability to review or question any such directions.
(d) If the Plan authorizes loans to Plan participants, the duties of the
Trustee and Administrator may be covered by a separate agreement to be
incorporated as part of this Agreement.
2.2 (a) Subject to the Investment Guidelines of the Trustee, any general or
specific investment guidelines formulated by the Company or the Administrator
and the provisions of Section 2.1 above, the person with investment
responsibility ("Authorized Person") may cause the Trust Fund to be invested and
reinvested in every kind of investment including, without limitation, publicly
traded equity and debt interests of all kinds issued by domestic or foreign
governments, business organizations, limited partnerships, investment companies
and trusts or other entities, convertible securities of all kinds,
interest-bearing deposits in any depository institution (including the Trustee
or any affiliate of the Trustee), money market securities of all kinds,
collective investments as described in subsection
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(b) below and insurance contracts as described in subsection (c) below.
Notwithstanding anything in the Trust Agreement to the contrary, the Trustee may
hold uninvested and without liability for interest such part of the Trust Fund
as may be reasonably necessary for the orderly administration of the Trust Fund.
(b) Subject to the following provisions, the assets of the Trust Fund may
be invested and reinvested, in whole or in part, in any common or collective
investment fund (referred to as the "fund") maintained by the Trustee or an
investment manager in which the Trust Fund is eligible to participate.
Notwithstanding any other provision of this Agreement, to the extent Trust Fund
assets are invested in any such fund, the terms of the fund's governing
instrument shall govern the investment responsibilities and powers of the entity
responsible for management of the fund (referred to as "fund manager"), and the
terms of such governing instrument shall be incorporated into the Trust
Agreement. The value of any interest in a fund held by the Trust Fund shall be
the fair market value of the interest as determined by the fund manager in
accordance with the fund's governing instrument. For purposes of valuation of
the Trust Fund assets, the Trustee shall be entitled to rely conclusively on the
value reported by the fund manager.
The Trust Fund may be invested in a pooled investment vehicle funded by
contracts issued by an insurance company qualified to do business in a state
(within the meaning of ERISA section 3(10)) including, without limitation, group
annuity and guaranteed investment contracts. Any such contract may provide for
the allocation of amounts received by the insurance company to its general
account, one or more of its separate accounts (including pooled separate
accounts), or both. To the extent Trust Fund assets are allocated to a separate
account of an insurance company, the Administrator shall appoint the insurance
company as an investment manager as provided above. Notwithstanding any other
provision of the Trust Agreement, the terms of the contract(s) governing the
separate account(s) in which the Trust Fund is invested shall govern the
investment responsibilities and powers of the insurance company and, to the
extent required by law, the terms of such contract(s) shall be incorporated into
the Trust Agreement.
(c) To the extent permitted by the Plan, the Authorized Person may direct
the Trustee to apply for and purchase life insurance or annuity contracts
(referred to as "contracts") from an insurance company, subject to the following
provisions:
(i) The Authorized Person shall be responsible for ensuring that the
purchases conform with the requirements of the Plan and any rules and policies
established by the Administrator regarding the form, value, optional settlement
methods and other provisions of the contracts. The Trustee shall not be
responsible for the validity or proper execution of any contract delivered to
it, or any act of any person which renders the contract void or voidable. The
Trustee shall not be responsible if the contract held in the Trust Fund fails to
meet the requirements of the Plan, and shall have no duty to inform participants
of the terms and conditions of any such contract.
(ii) The Administrator shall instruct the insurance company to notify the
Administrator of all premiums becoming due under the contracts. The
Administrator shall deliver all premium notices to the Trustee, together with a
direction to the Trustee to pay the premiums out of the Trust Fund. The Trustee
shall have no responsibility for paying the premium unless sufficient assets of
the Trust Fund are available for that purpose.
(iii) The Administrator shall cause the Trustee to be designated as the
sole owner of any such contract, with sole power to exercise all rights,
privileges, options and other incidents of ownership at the Administrator's
direction. The Administrator from time to time shall direct the Trustee
regarding the designation of a beneficiary of the death benefit payable under
any such contract in accordance with the applicable provisions of the Plan.
(d) To the extent permitted by the Plan and ERISA and subject to the
applicable federal and state securities laws, the Authorized Person may direct
the Trustee to invest in qualifying employer securities within the meaning of
ERISA section 407(d)(5) ("Employer Securities"). The Administrator shall have
full responsibility for determining that any such investment, and the voting
rights attributable to such investment, complies with applicable law.
Notwithstanding any other provision of the Plan or Trust Agreement, the
Administrator shall have responsibility for voting any shares or directing that
such shares shall be sold, exchanged or otherwise disposed of except to the
extent that such duties are made the responsibility of another person or persons
under the terms of the Plan or other governing documents, and such person
performs according to such terms.
2.3 In its administration of the Trust Fund, the Trustee shall have and
exercise whatever powers are necessary to discharge its obligations and exercise
its rights under the Trust Agreement. Subject to the direction of the
Administrator, participants, or an investment manager as provided in
Section 2.1, the Trustee shall have full power
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and authority with respect to property held in the Trust Fund to do all such
acts, take all proceedings, and exercise all such rights and privileges, whether
specifically referred to or not in this documents, as could be done, taken, or
exercised by the absolute owner, including, without limitation, the following:
(a) To collect income generated by the Trust Fund investments and proceeds
realized on the sale or disposition of assets and to hold the same pending
reinvestment or distribution in accordance with this Agreement;
(b) To register Trust Fund property in the Trustee's own name, in the name
of a nominee or in bearer form, provided the Trustee's records and accounts show
that such property is an asset of the Trust Fund;
(c) To deposit securities in a security depository and permit the
securities so deposited to be held in the name of the depository's nominee, and
to deposit securities issued or guaranteed by the U.S. government or any agency
or instrumentality thereof, including securities evidenced by book entry rather
than by certificate, with the U.S. Department of the Treasury, a Federal Reserve
Bank or other appropriate custodial entity, in the same account as the Trustee'
own property, provided the Trustee's records and accounts show that such
securities are assets of the Trust Fund;
(d) To hold securities issued by a foreign government or business entity at
a foreign office of the Trustee or any of its affiliates, or to deposit such
securities with a foreign securities depository or bank regulated by a
government agency or regulatory authority in the foreign jurisdiction, and to
permit the securities so deposited to be held in the nominee name of the
depository or bank, provided that the Trustee's records and accounts show that
such securities belong to the Trust Fund;
(e) To retain the property in the Trust;
(f) To sell Trust assets, at either public or private sale, at such time or
times and on such terms and conditions as it may deem appropriate;
(g) To consent to or participate in any plan for the reorganization,
consolidation, or merger of any business unit, any security of which is held in
the Trust Fund, to pay calls and assessments imposed upon the owners of such
securities as condition of their participating therein, and to consent to any
contract, lease, mortgage, purchase or sale of property, by or between such
business unit and any other party;
(h) To exercise or dispose of any right it may have as the holder of any
security, to convert the same into another security, to acquire any additional
security or securities, to make any payments, to exchange any security, or to do
any other act with reference thereto;
(i) To renew or extend the time of payment of any obligation due or
becoming due;
(j) To grant options to purchase property held in the Trust;
(k) To compromise, arbitrate, or otherwise adjust or settle claims in favor
of or against the Trust and to deliver or accept consideration in either total
or partial satisfaction of any indebtedness or other obligation, and to continue
to hold property so received for the period of time that the Trustee deems
appropriate;
(l) To exchange any property for other property upon such terms and
conditions as the Trustee may deem proper, and to give or receive money to
effect equality in price;
(m) To foreclose any obligation by judicial proceeding or otherwise;
(n) To xxx or defend in connection with any and all securities or property
at any time received or held in the Trust Fund and to charge against the Trust
Fund all reasonable expenses and attorney's fees in connection therewith;
(o) To manage any real property in the same manner as if the Trustee were
the absolute owner thereof, including the power to lease the same for such term
or terms, and upon such conditions including, but without limitation, agreements
for the purchase or disposal of buildings on the property or options to the
tenant to renew such lease from time to time or to purchase such property as the
Trustee deems proper; to make ordinary and extraordinary repairs and alterations
to any property that the Trustee deems proper; to make ordinary and
extraordinary repairs and alterations to any building, to raze old buildings, to
erect new buildings, to insure against loss by fire or other casualties, and to
employ agents and confer upon them authority with respect to the management of
such real property as the Trustee deems appropriate;
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(p) To borrow money from any person other than a party in interest of the
Plan with or without giving security;
(q) To deposit any security with any protective or reorganization
committee, and to delegate to that committee such power and authority as the
Trustee may deem proper, and to agree to pay out of the Trust Fund that portion
of the expenses and compensation of that committee as the Trustee may deem
proper;
(r) To deliver to the Administrator, or the person or persons identified by
the Administrator, proxies and powers of attorney and related informational
material, for any shares or other property held in the Trust. The Administrator
shall have responsibility for voting such shares, by proxy or in person, except
to the extent such responsibility is delegated to another person, under the
terms of the Plan or Trust Agreement or under an agreement between the named
fiduciary of the Plan and an investment manager, in which case such persons
shall have such responsibilities. The Trustee may use agents to effect such
delivery to the Administrator or the person or persons identified by the
Administrator. In no event shall the Trustee be responsible for the voting of
shares of securities held in the Trust or for ascertaining or monitoring
whether, or how, proxies are voted or whether the proper number of proxies is
received;
(s) To appoint agents as necessary or desirable, including legal counsel
who may be counsel for the Company;
(t) To hold that portion of the Trust Fund as the Trustee may deem
necessary for ordinary administration and for the disbursement of funds in cash,
without liability for interest, by depositing the same in any bank (including
deposits which bear a reasonable rate of interest in a bank or similar financial
institution supervised by the United States or a State, even where a bank or
financial institution is the Trustee, or otherwise is a fiduciary of the Plan,
including The Xxxxxxx Xxxx Trust Company), subject to the rules and regulations
governing such deposits, and without regard to the amount of any such deposit;
(u) To retain group or individual insurance contracts of all kinds
authorized under the Plan;
(v) If directed by the Administrator, participant, or investment manager,
to acquire, hold, and administer limited partnership interests, or interests in
other specialized investment vehicles, provided that such Authorized Person
signs any agreement or other necessary documents requested by the Trustee prior
to entering into the transaction;
(w) To write covered call options on securities where appropriate for the
Trust; provided that any such transaction is in conformity with the Plan and all
applicable rules, regulations, and laws governing the Trustee, the Plan, and
this Trust;
(x) To the extent permitted under applicable laws, to invest in deposits,
long and short term debt instruments, stocks, and other securities, including
those of the Trustee, The Xxxxxxx Xxxxxx Corporation (the "Public Company"),
Xxxxxxx Xxxxxx & Co., Inc. (the "Broker/Dealer"), their affiliates and
subsidiaries;
(y) To lend securities from the Trust on a secured basis in accordance with
a separate written agreement between the Administrator and the Trustee.
2.4 The Trustee is authorized to contract or make other arrangements with
The Xxxxxxx Xxxxxx Corporation (the "Public Company"), Xxxxxxx Xxxxxx & Co.,
Inc. (the "Broker/ Dealer"), their affiliates and subsidiaries, successors and
assigns and any other organizations affiliated with or subsidiaries of the
Trustee or related entities, for the provision of services to the Trust or Plan,
except where such arrangements are prohibited by law or regulation.
2.5 The Trustee is authorized to place securities orders, settle securities
trades, hold securities in custody, and other related activities on behalf of
the Trust through or by the Broker/Dealer whenever possible, unless the
Authorized Person specifically instructs the use of another broker/dealer.
Trades (and related activities) conducted through the Broker/Dealer shall be
subject to fees and commissions established by the Broker/Dealer, which may be
paid from the Trust or netted from the proceeds of trades.
Trades shall not be executed through the Broker/Dealer unless the
Administrator and the Authorized Person have received disclosure concerning the
relationship of the Broker/Dealer to the Trustee, and fees and commissions which
may be paid to the Public Company, Broker/Dealer, the Trustee and/or their
affiliates or subsidiaries as a result of using the Broker/Dealer's execution or
other services.
The Trustee is authorized to disclose such information as is necessary to
the operation and administration of the Trust to the Public Company or any of
its affiliates, and to such other persons or organizations that the Trustee
determines have a legitimate business purpose for obtaining such information.
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2.6 At the direction of the Authorized Person, the Trustee may purchase
shares of regulated investment companies (or other investment vehicles) advised
by the Holding Company, Broker/Dealer or the Trustee or any affiliate of any of
them ("SchwabFunds") except to the extent that such investment is prohibited by
law or regulation.
(a) Uninvested cash of the Trust will be invested in SchwabFunds designated
by the Authorized Person for that purpose, unless the Authorized Person
specifically instructs the use of another fund or account, except to the extent
prohibited by law or regulation.
SchwabFunds shares may not be purchased or held by the Trust unless the
Authorized Person has received disclosure concerning the Public Company's,
Broker/Dealer's, the Trustee's and/or their affiliate's or subsidiary's
relationship to the Funds, and any fees which may be paid to the Public Company,
Broker/Dealer, Trustee and/or their affiliates or subsidiaries.
2.7 The Administrator shall have responsibility for establishing and
carrying out a funding policy and method, as specified in section 402(b)(1) of
ERISA, consistent with the objectives of the Plan and the requirements of ERISA,
taking into consideration the Plan's short-term and long-term financial needs.
The Trustee shall not be responsible for proper diversification of the
assets of the Trust Fund. The Administrator or the person to whom such
responsibility has been properly delegated under the requirements of ERISA shall
be responsible for the funding policy, for diversification of assets held in
trust for the Plan, and for compliance of the Trust Fund with statutory
limitations on the amount of investment in securities or other property of the
Company or its affiliated companies.
2.8 No assets of the Trust Fund shall be invested in the securities of the
Company or its affiliates unless the Administrator determines that the
securities are exempt from registration under the federal Securities Act of
1933, as amended, and are exempt from registration or qualification under the
applicable state law, and of any other applicable blue sky law, or in the
alternative, that the securities have been so registered and/or qualified. The
Administrator shall also specify what restrictive legend on transfer, if any, is
required to be set forth on the certificates for the securities and the
procedure to be followed by the Trustee to effectuate a resale of such
securities. The Administrator shall not direct the investment in "employer
securities" or "employer real property", within the meaning of section 407 of
ERISA, if such investment would be prohibited by ERISA. The Administrator shall
only direct the investment of Trust funds into securities of the Company or an
affiliate (i) if those securities are traded on an exchange permitting a readily
ascertainable fair market value, or (ii) if the Administrator shall have
obtained a current valuation by a qualified independent appraiser.
2.9 The Trustee shall make distributions or transfers from the Trust as
specified in written directions from the Administrator. The Trustee is
authorized, to the extent required under applicable law, to withhold from
distributions to any payee an amount that the Trustee determines in necessary to
cover federal and state taxes, and the Trustee is required to withhold such
amounts if so directed by the Administrator. The Trustee shall have no liability
for making any distribution or transfer pursuant to the direction of the
Administrator (including amounts withheld pursuant to the previous sentence) and
shall be under no duty to make inquiry whether any distribution or transfer
directed by the Administrator is made pursuant to the provisions of the Plan.
The Administrator shall furnish to the Trustee all information necessary to
carry out such withhold, or, if such information is not provided to the Trustee,
the Administrator shall hold the Trustee harmless from and indemnify it for any
liability and related expenses that arise in connection with improper
withholding.
The Trustee shall not be liable for the proper application of any part of
the Plan or Trust if distributions or transfers are made in accordance with the
written directions of the Administrator including any distribution made pursuant
to a domestic relations order which the Administrator has determined to be
qualified within the meaning of section 414(p) of the Code, nor shall the
Trustee be responsible for the adequacy of the Trust Fund to discharge any and
all payments and liabilities under the Plan.
2.10 The Trustee may make any payment required for it under this Agreement
by mailing its check for the amount specified to the recipient at such address
last furnished to the Trustee by the Administrator, or if the Trustee has never
received an address, to the recipient in care of the Administrator.
2.11 All persons dealing with the Trustee are released from inquiring into
the decision or authority of the Trustee and from seeing to the proper
application of any monies paid or securities or other property delivered to the
Trustee.
2.12 The Trustee shall bear no liability for acting upon any instructions
or document believed by it to be genuine and to be presented or signed by a
party duly authorized to
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do so, and the Trustee shall be under no duty to make any investigation or
inquiry about the correctness of such instruction or document.
2.13 The Trustee may consult with legal counsel of its choice, including
counsel for the Company, upon any question or matter arising hereunder and the
opinion of such counsel when relied upon by the Trustee shall be evidenced the
Trustee was acting in good faith.
2.14 If, as provided in the Plan, other trustees of separate trusts under
the Plan may be appointed, the Trustee under this Agreement shall have no duties
or responsibilities for Plan assets not held in the Trust by the Trustee, except
as required by applicable law.
ARTICLE III - SETTLEMENT OF ACCOUNTS
3.1 (a) The Trustee shall maintain accurate records and detailed accounts
of all investments, receipts, disbursements, and other transactions related to
the Trust, and those records shall be available at all reasonable times to the
Administrator, the Company, or their authorized representatives.
(b) The Trustee, at the direction of the Administrator, shall submit to the
Administrator and any other person that the Administrator designates those
valuations, reports, or other information as the Administrator may reasonably
require. In any case, the Trust Fund shall be valued by the Trustee at the
frequency agreed to by the Trustee and the Company, but in any event not less
than annually at the fair market value as of the close of business at the end of
the last business day of the fiscal year of the Plan. Except as specified below,
in the absence of fraud or bad faith, the Trustee's valuation of the Trust Fund
shall be conclusive.
3.2 (a) Within sixty days following the close of each fiscal year of the
Plan or the close of any other period as may be agreed upon by the Trustee and
the Administrator, the Trustee shall file with the Administrator a written
account setting forth a description of all securities and other property
purchased and sold, all receipts, disbursements, and other transactions effected
by it during that fiscal year or other designated period, and listing the
securities and other property held by the Trustee at the end of such fiscal year
or other designated period, together with their then fair market values.
(b) The Administrator may approve an account by written notice of approval
delivered to the Trustee or by failure to deliver to the Trustee express
objections to the account in writing within sixty days from the date upon which
the account was mailed or otherwise delivered to the Administrator.
(c) The account shall be deemed approved upon receipt by the Trustee of the
Administrator's written approval of the account or upon the passage of the sixty
day period of time, except for any matters covered by written objections that
have been delivered to the Trustee by the Administrator and for which the
Trustee has not given an explanation or made an adjustment satisfactory to the
Administrator.
(d) If the account is not settled as provided above, the Trustee, the
Company or the Administrator shall have the right to apply to a court of
competent jurisdiction at the expense of the Trust Fund for a judicial
settlement of the accounting. Any judgment or decree entered in such proceedings
shall be conclusive on all persons interested in the Trust Fund.
3.3 Notwithstanding any other provision of this Article 3, if the Trustee
shall determine that the Trust Fund consists in while or in part of property not
traded freely on a recognized market, or that information necessary to ascertain
the fair market value is not readily available, the Trustee may request
instructions from the Administrator on the value of such property for all
purposes under the Plan and this Trust Agreement, and the Administrator shall
comply with that request. The Trustee shall be entitled to rely upon the value
placed upon such property by the Administrator. At the Trustee's option, it may
request that the Administrator hire an independent appraiser that meets the
requirements of Code section 401(a)(28)(C) to value the property. Alternatively,
if the Trustee chooses, or if the Administrator shall fail or refuse to instruct
the Trustee on the value of such property within a reasonable time after receipt
of the Trustee's request, the Trustee at its sole discretion may engage an
independent appraiser to determine the fair market value of such property. Any
expenses with respect to such appraisal shall be paid by the Trustee out of the
Trust Fund or, at the option of the Company, by the Company.
ARTICLE IV - INDEMNIFICATION
4.1 To the extent permitted under ERISA, the Company shall indemnify and
hold harmless the Trustee, its officers, employees, and agents from and against
all liabilities, losses, expenses, and claims (including reasonable attorneys'
fees and costs of defense) arising out of (1) the acts or omissions to act with
respect to the Plan or Trust by persons unrelated to the Trustee ("unrelated
persons"),
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(2) the Trustee's action or inaction with respect to the Plan or Trust
resulting from reliance on the action or inaction of unrelated persons,
including directions to invest or otherwise deal with Plan assets, or (3) any
violation by any unrelated person of the provisions of ERISA or the regulations
thereunder, unless Trustee commits a breach of its duties by reason of its
negligence or willful misconduct. Expenses incurred by the Trustee which it
believes to be subject to indemnification under this Agreement shall be paid by
the Company upon the Trustee's request, provided that the Company may delay
payment of any amount in dispute until such dispute is resolved according to the
provisions of Sec. 8.5 of the Agreement. Such resolution may include the award
of interest on unpaid amounts determined to be payable to the Trustee under this
Section.
ARTICLE V - TAXES, EXPENSES AND COMPENSATION OF TRUSTEE
5.1 The Trustee shall notify the Plan Administrator of any tax levied upon
or assessed against the Trust Fund of which the Trustee has knowledge. If the
Trustee receives no instructions from the Administrator, the Trustee may pay the
tax from the Trust Fund. If the Plan Administrator wishes to contest the tax
assessment, it shall give appropriate written instructions to the Trustee. The
Trustee shall not be required to bring any legal actions or proceedings to
contest the validity of any tax assessments unless the Trustee has been
indemnified to its satisfaction against loss or expense related to such actions
or proceedings, including reasonable attorneys' fees.
5.2 The Company shall quarterly pay the Trustee its expenses in
administering the Trust Fund and reasonable compensation for its services as
Trustee at a rate set forth in the Fee Schedule, which may be amended from time
to time. The Trustee reserves the right to alter this rate of compensation at
any time by providing the Company with notice of such change at least sixty days
prior to its effective date. Reasonable compensation shall include compensation
for any extraordinary services or compensations required, such as determination
of the value of assets when current market values are not published, and the
covering of overdrafts. The Trustee shall have a lien on the Trust Fund for
compensation and for any reasonable expenses including counsel, appraisal, or
accounting fees, and such amounts may be withdrawn from the Trust Fund unless
paid by the Company within thirty days after mailing of the written billing by
the Trustee.
ARTICLE VI - RESIGNATION OR REMOVAL OF TRUSTEE
6.1 The Trustee may resign as Trustee hereunder or may be removed by the
Company. This resignation or removal may be accomplished at any time upon the
giving of sixty days written notice to the Trustee or Company, as applicable (or
less if the other party agrees to waive notice). Upon resignation or removal,
the Company shall appoint a successor Trustee who shall then succeed to all the
powers and duties given to the Trustee by this Agreement. The terminating
Trustee shall transfer all property of the Trust Fund then held by its to such
successor Trustee. The terminating Trustee may require as a condition of making
such transfer that the successor Trustee present evidence that any bonding
requirement under ERISA section 412 has been met and/or may require that the
Company provide a writing indemnifying the Trustee against any losses arising
from the replacement of the Trustee. If either party has given notice of
termination as provided under this Agreement, and upon the expiration of the
advance notice period no other successor Trustee has been appointed and has
accepted such appointment, this provision shall serve as (i) notice of
appointment of the chief executive officer of the Company as Trustee and (ii) as
acceptance by that person of that appointment. The Trustee is authorized to
reserve such sum of money as it may deem advisable for payment of its fees and
expenses in connection with the settlement of its accounts or other proper Trust
expenses, and any balance of such reserve remaining after the payment of such
fees and expenses shall be paid to the successor Trustee.
6.2 Within sixty days of the transfer of the successor Trustee, the
terminating Trustee shall provide the Company with an account in the form and
manner prescribed for the annual account by Article 3. Unless the Company files
with the Trustee written objections within sixty days after such account has bee
mailed or otherwise delivered, the account shall be deemed to have been
approved.
ARTICLE VII - AMENDMENT AND TERMINATION OF TRUST
7.1 It is the intention of the Company that this Trust and the Plan of
which it is a part shall be permanently administered for the benefit of the
Plan's participants and their beneficiaries, and defraying reasonable expenses
of administering the Plan. This Trust is, accordingly, irrevocable except with
respect to Section 8.4; however, if changing conditions require, this Trust may
be terminated at any time by the Company, and upon such termination, the Trust
Fund shall be distributed by the Trustee as and when directed by the
Administrator in accordance with the provisions of Section 2.9 and the Plan
document. From the date of termination of the Plan and until the final
distribution of the Trust assets, the Trustee shall continue to have all the
powers provided under this Agreement that are necessary or
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desirable for the orderly liquidation and distribution of the Trust Fund. In no
instance upon any termination, or discontinuance, and subsequent distribution
shall the Trust Fund or any part of it be used for, or diverted to, purposes
other than providing benefits to participating employees and their
beneficiaries, and defraying the administrative expenses of the Plan until all
Plan liabilities have been satisfied, except in the instance of the failure of
the Trust initially to qualify for tax-exempt status as set forth in
Section 8.4.
7.2 This Trust Agreement, other than Section 7.1 may be amended at any time
by written agreement of the Company and the Trustee, provided that such
amendment shall not operate:
(i) to cause any part of the Trust Fund to revert to be recoverable by the
Company or to be used for or diverted to purposes other than the exclusive
benefit of participants and their beneficiaries, except to the extent permitted
by law and the Plan; or
(ii) to reduce the then accrued benefits or the amounts then held for the
benefit of any participant or beneficiary of the Plan.
7.3 The Trustee may condition the transfer or distribution of any assets of
the Trust Fund upon termination of the Trust on receipt of a favorable
determination letter from the Internal Revenue Service confirming that the
termination of the Plan does not adversely affect the tax-exempt status of the
Trust Fund. Alternatively, the Trustee, in its sole discretion, may accept the
indemnification of the Trustee against any liability arising from such transfer
or distribution that is provided by the Company or may require the Company to
post a bond sufficient to protect the Trustee against such liability until such
time as a favorable determination letter is received.
ARTICLE VIII - MISCELLANEOUS
8.1 The Trust will be administered in the State of California, and its
validity, construction, and all rights hereunder shall be governed by ERISA and,
to the extent not preempted, by the laws of California. If any provisions of
this Agreement shall be invalid or unenforceable, the remaining provisions shall
continue to be fully effective.
8.2 The headings in this instrument have been inserted for convenience of
reference only, and are to be ignored in any construction of the provision of
this Agreement.
8.3 No person entitled to any benefit under this Trust and the Plan shall
have any right to assign, alienate, hypothecate, or encumber his interest in any
benefits under this Agreement (except as to any loans under the Plan) and those
benefits shall not in any way be subject to claim of his creditors or liable to
attachment, execution, or other process of law except to the extent required
under a qualified domestic relations under within the meaning of section 414(p)
of the Code.
8.4 It is intended that this Trust shall be tax exempt under section 501 of
the Code and that the Plan referred to herein shall qualify under section 401(a)
of the Code. However, notwithstanding any other provisions of the Trust, if the
Internal Revenue Service is requested to issue to the Company a favorable
written determination or ruling with respect to the initial qualification of the
Plan and exemption of the Trust from tax and such request is denied, the Trustee
shall, after receiving a written direction from the Administrator, pay to each
participant that portion of the Trust Fund applicable to said participant's
voluntary contributions, if any, and provided the Plan so states, pay to the
Company an part of the Trust Fund attributable to Company contributions then
remaining in the Trustee's possession. As a condition of such repayment, the
Company must execute, acknowledge, and deliver to the Trustee its written
undertaking in form satisfactory to the Trustee, to indemnify, defend, and hold
the Trustee harmless from all claims, actions, demands, or liabilities arising
on connection with such repayment, and provided further that such repayment will
occur within one year after the date the request for qualification is denied.
8.5 Any dispute under this Agreement shall be resolved by submission of the
issue to a member of the American Arbitration Association who is chosen by the
Company and the Trustee. If the Company and the Trustee cannot agree on such a
choice, each shall nominate a member of the American Arbitration Association,
and the two nominees will then select an arbitrator. Expenses of the arbitration
shall be paid as decided by the arbitrator.
8.6 This Trust Agreement is incorporated into and is a part of the Plan.
Anything in any other part of the Plan that is inconsistent with this Trust
Agreement is overridden, and in the case of such conflict, the terms of this
Trust Agreement shall govern.
8.7 The duties and responsibilities of the Trustee shall be solely those
set forth in this document. The trustee shall not be a named fiduciary under the
Plan and shall not have the authority to interpret the Plan.
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8.8 To the extent permitted by statutory or administrative exemption, the
Trustee may engage in actions that otherwise would violate section 406 of ERISA.
8.9 Each fiduciary shall be solely responsible for the fiduciary's own acts
or omissions under the Plan or the Trust. Except to the extent otherwise
provided by ERISA, the parties specifically intend that no fiduciary shall be
liable for any breach of fiduciary responsibility of another fiduciary.
8.10 The Trustee is authorized to tape record conversations between the
Trustee and persons acting on behalf of the Plan or a participant of the Plan to
verify data on transactions.
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IN WITNESS WHEREOF, XXXXXX SAVINGS AND LOAN ASSOCIATION and THE XXXXXXX XXXXXX
TRUST COMPANY, have caused this Agreement to be executed by their respective
officers thereunto duly authorized as of the day and year first above written.
COMPANY NAME: XXXXXX SAVINGS AND LOAN ASSOCIATION
By: /S/ XXXXXX XXXXXX
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Printed Name: Xxxxxx Xxxxxx
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Title: SVP, Director of Human Resources
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THE XXXXXXX XXXXXX TRUST COMPANY
Trustee
By: /S/ XXXXX XXXXXXXXX
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Printed Name: Xxxxx Xxxxxxxxxx
--------------------------
Title: Senior Account Administrator
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