EXHIBIT 10.2
TBC CORPORATION
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT amends and restates, effective as of August
1, 1997, that certain Executive Employment Agreement, dated as of June 1,
1996, between TBC CORPORATION, a Delaware corporation (the "Company"), and
XXXXX X. XXXXXXX, who resides at 000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxxx
00000 (the "Executive").
IN CONSIDERATION of the respective covenants of the parties
contained herein, the parties hereto agree as follows:
Section 1. Term of Employment. The Company hereby agrees
to employ the Executive, and the Executive hereby agrees to continue in
the employ of the Company, for a period of three years commencing June 1,
1996 and, unless sooner terminated as provided in Section 6, terminating
on the later of May 31, 1999, or one (1) year after the occurrence of a
Change in Control of the Company in the event a Change in Control of the
Company shall have occurred on or prior to May 31, 1999.
Section 2. Position and Duties. A. During the term of
employment, the Company shall employ the Executive as, and the Executive
shall serve as, Senior Vice President Strategic Planning of the Company,
with his duties, authority and responsibilities to be such as may be
assigned by the Chief Executive Officer of the Company or in such other
executive capacity as the Company shall reasonably request.
B. The Executive shall devote his full-time efforts to
the business and affairs of the Company and shall perform his duties as an
executive officer, or in such other executive capacity as the Company
shall reasonably request, faithfully, diligently and to the best of his
ability and in conformity with the policies of the Company and under and
subject to such reasonable directions and instructions as the Board of
Directors and the Chief Executive Officer may issue from time to time.
Section 3. Salary. The Company shall pay the Executive a
salary of $180,000 per year in approximately equal installments in
accordance with the normal pay schedule for officers of the Company.
Section 4. Deferred Compensation. A. The Executive may
elect to defer payment of all or a specified part of the salary and other
compensation payable for the Executive's services by executing an Election
(the "Election") in a form prescribed by or acceptable to the Company and
delivering the same to the Secretary of the Company. The Election shall
be effective as of the
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first day of the next succeeding calendar year and shall apply only to
compensation payable for services rendered on or after the effective date
of the Election. The Election shall remain in effect until terminated or
changed as provided in this Agreement.
B. The Executive may terminate any Election relating to
future services by giving written notice of termination to the Secretary
of the Company. The Executive may change any Election relating to future
services by executing a revised Election and delivering such Election to
the Secretary of the Company. Any such termination or change in the
amount or part to be deferred shall be effective only with respect to
compensation payable for services on or after the first day of the next
succeeding calendar year.
C. The Company shall establish and maintain a deferred
compensation account on its books in the name of the Executive in which
shall be recorded the amount of the Executive's deferred compensation.
The Company shall credit to the deferred compensation account, on a daily
basis, interest on the amount then credited to such account (including all
previous credits to such account by operation of this Paragraph C)
computed at an annual rate which is equal to the average yield for BBB
Industrial Bonds, as published in the Standard & Poor's Corporate and
Government Bond Yield Index (or such similar index as the Compensation
Committee of the Board of Directors of the Company shall select) for the
month last preceding the beginning of such calendar quarter.
D. All amounts and assets credited to or held in the
deferred compensation account referred to in Section 4.C. of this
Agreement ("Credited Amounts") shall be paid as follows:
1. If the Executive's employment with the Company is
terminated for any reason, including his death or
disability, the Company shall pay the Credited Amounts or
the fair market value thereof, as of the date of such
termination, wholly or partly in cash or in kind, to the
Executive, or, in the event of his death, to his designated
beneficiary or beneficiaries or his estate, as the case may
be, on or before a day fourteen (14) days after the date of
such termination; provided, however, that if such
termination occurs on or after August 31 in any year and the
Executive is then living, then and in that event, the
Company shall make such payment on the earlier of (i) the
first business day of the following calendar year or (ii) in
the event of his earlier death, on or before a day fourteen
(14) days after the date of his death.
2. The beneficiary or beneficiaries referred to in
this paragraph may be designated or changed by the Executive
(without the consent of any prior beneficiary) by a writing
delivered to the Company before his death. If there shall
be no designated beneficiary who shall survive the Executive
as to all or any part of the Credited Amounts, the same (or
its fair market value) shall be paid to the Executive's
estate.
E. The deferred compensation account shall be solely a
memorandum account, and title to and beneficial ownership of any amounts
credited thereto shall at all times remain in the Company. The effect of
this Section 4 is simply to create an unfunded and unsecured promise to
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pay deferred compensation to the Executive, his estate or his
beneficiaries, in accordance with the terms of this Agreement. Nothing
contained herein and no deferral of compensation pursuant hereto shall by
itself create or be construed to create a trust of any kind, or a
fiduciary relationship of any kind regarding the deferred compensation
between the Company and the Executive, his estate or any beneficiary of
the Executive or any other person. No right or benefit under this
Agreement shall be subject to anticipation, alienation, sale, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate,
sell, assign, pledge, encumber or charge the same shall be void.
Section 5. Other Benefits. In addition to the salary and
deferred compensation payable pursuant to Sections 3 and 4, the Executive
shall, during the term of his employment, participate in the Company's
1989 Management Incentive Compensation Plan, the 1989 Stock Incentive
Plan, and in any other stock option or compensation plan or arrangement
adopted by the Company in addition to, or in lieu of, said plans. The
Company shall also, during the term of the Executive's employment,
continue to extend to Executive the fringe benefits (including, but not
limited to, medical, disability and life insurance, vacation, personal
leave, automobile and other similar personal benefits) which it
establishes from time to time for its most highly compensated executives.
The Executive shall be entitled to a car allowance thereunder at Level II,
at the rate of $1,145 per month.
Section 6. Termination of Employment. A. The Executive's
Employment shall terminate upon the death of the Executive, but the
Company shall continue to pay each month for six (6) months after the
death of the Executive an amount per month equal to the salary per month
(inclusive of the amount of deferred compensation) that was being paid to
the Executive at the time of his death to the person or entity that the
Executive shall have last designated in writing to the Company, or if the
Executive shall fail to designate a person or entity or if the person or
entity so designated shall not be in existence at the time of any payment
pursuant to this Section 6.A., then to the Executive's estate. Nothing in
this Section 6.A. shall in any way limit or restrict any rights or
benefits to which the heirs, legatees or successors in interest of the
Executive are entitled under any plans, insurance or other arrangements
referred to in Section 5 hereof in the event of the Executive's death.
B. The Company shall have the right to terminate the
Executive's employment hereunder at any time upon not less than sixty (60)
days' advance written notice to the Executive in the event (i) of such
prolonged physical or mental disability or other condition of the
Executive as, in the reasonable judgment of the Board of Directors, shall
render him incapable of performing the services required of him hereunder;
provided, however, that no disability or condition shall be considered
incapacitating unless it has prevented the Executive from carrying on his
duties for a consecutive period of at least three (3) months; (ii) that
the Executive engages in an act or acts of dishonesty constituting a
felony and resulting or intended to result directly or indirectly in
personal gain or enrichment at the expense of the Company; or (iii) that
the Executive shall deliberately and intentionally refuse in a material
way to observe or comply with any of the material terms or provisions
hereof (except by reason of total or partial incapacity due to physical or
mental disability or otherwise); provided further, however, that the
Executive's employment
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shall not terminate if such disability or refusal is cured or corrected
within the 60-day notice period provided herein. In addition to any
retirement benefits payable to the Executive under Section 7, in the event
Executive's employment is terminated as the result of disability pursuant
to Section 6.B(i), the Company shall continue to pay to the Executive each
month for six (6) months after such termination an amount equal to his
salary per month (inclusive of the amount of deferred compensation) at the
time of such termination.
C. If a Change in Control of the Company shall occur on
or prior to May 31, 1999, and the employment of the Executive shall
terminate during the period of one (1) year following the Change in
Control of the Company, regardless of whether the Executive resigns or is
discharged or otherwise (except for termination pursuant to the provisions
of Sections 6.A. or 6.B. above), the following shall be applicable:
1. During the remainder of the period specified in
Section 1 hereof or for a period of one (1) year after such
termination of employment, whichever is longer, the Company shall
continue to pay to the Executive an amount equal to the salary
determined in accordance with the provisions of Section 3 and shall
credit him with an amount equal to the deferred compensation
determined in accordance with the provisions of Section 4.
2. Beginning on the first day of the month following
such termination of the Executive's employment and on the first day
of every month thereafter during the period of time specified in
Section 6.C.1. above, the Company shall pay to Executive one-
twelfth (1/12) of the sum of any benefits which the Executive may
have been awarded under any incentive compensation plans of the
Company during the last two fiscal years of the Company preceding
the year in which the termination of the Executive's employment
occurred, divided by two.
3. During the time period specified in Section 6.C.1.
above, the Company shall, at its expense, provide to or for the
benefit of the Executive fringe benefits comparable to those
provided prior to the Change in Control of the Company.
4. Any options or stock appreciation rights which the
Executive holds under the 1989 Stock Incentive Plan of the Company
(or under any other option plan of the Company) on the date of the
termination of his employment may be exercised by the Executive
with respect to all shares subject to any such options or rights at
any time within ninety (90) days of the Executive's termination of
employment, regardless of whether such options or rights were
exercisable on the date of termination; or at any time within
ninety (90) days after the termination of the Executive's
employment, the Executive may, in lieu of exercising all or any
portion of any such option or right, elect to be paid by the
Company in cash the excess of the fair market value of a Company
share (as defined in the 1989 Stock Incentive Plan of the Company)
on the date the election is made (or, if higher, the highest price
per Company share actually paid in connection with the Change in
Control of the
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Company) over the option price per share times the number of shares
then subject to unexercised options held by the Executive as to
which this election is made, whether or not such options were
exercisable on the date of the termination of the Executive's
employment. Any payment required to be made to the Executive
pursuant to the preceding sentence shall be made within two (2)
days of the Executive's election to be paid in cash.
5. Within forty-five (45) days after the end of the
fiscal year in which termination of the Executive's employment
occurs, the Company shall make pro rata awards to the Executive
under any incentive compensation plans of the Company in which he
participated which shall be calculated by multiplying (i) the
fraction of which the numerator is the number of full months worked
during such year and the denominator is twelve (12) and (ii) by the
awards which would have been earned (as determined by the
Compensation Committee) if termination had not occurred during such
year.
6. If the Executive dies during the period that he is
receiving compensation or fringe benefits pursuant to the
provisions of Section 6.C.1., 2. or 3., the Company shall continue
to make such payments to the person or entity entitled thereto
pursuant to Section 6.A. for the period of time provided in Section
6.C.1. but in no event for a period of more than six (6) months
after the Executive's death. If the Executive dies prior to
receiving the payments specified in Section 6.C.5. or prior to
exercising his rights under Section 6.C.4., such payments shall be
made at the time they are required to be made hereunder to the
person or entity entitled thereto pursuant to Section 6.A., and
such rights may be exercised during the time the Executive could
have exercised them but for his death by the person or entity
entitled thereto pursuant to Section 6.A.
7. A "Change in Control" of the Company shall, for
purposes of this Agreement, mean any change in control of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") as the same
is construed by the Securities and Exchange Commission on the date
of execution of this Agreement or in accordance with any change
made with respect to said Item or construction thereof deemed more
favorable by the Executive; provided that, without limitation, such
a Change in Control shall be deemed to have occurred if (i) any
"person" (as such term is defined in Sections 13(d) and 14(d)(2) of
the Exchange Act), other than the Executive and/or any entity then
controlled by the Company or the Executive is or becomes the
beneficial owner, directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of
the Company's then outstanding securities; (ii) during any period
of two (2) consecutive years, individuals who at the beginning of
such period constitute the Board cease for any reason to constitute
at least a majority thereof unless the election, or the nomination
for election by the Company's stockholders, of each new
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director was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who were directors at the beginning
of the period; (iii) the Company merges or consolidates with
another corporation and the Company or an entity controlled by the
Company or the Executive immediately prior to the merger or
consolidation is not the surviving entity; or (iv) a sale, lease,
exchange or other disposition of all or substantially all of the
assets of the Company takes place.
8. So long as the Executive shall be receiving
payments under Section 6.C.1. above, the Executive shall not engage
in any Competitive Activity. For purpose of this Agreement,
"Competitive Activity" shall mean the Executive's participation,
without the written consent of the Company, in the management of
any business operation of any enterprise if such operation (a
"Competitive Operation") engages in substantial and direct
competition with any business operation actively conducted by the
Company or its subsidiaries. "Competitive Activity" shall not
include (i) the mere ownership of securities in any enterprise or
(ii) participation in the management of any enterprise or any
business operation thereof, other than in connection with a
Competitive Operation of such enterprise.
Section 7. Retirement Benefit. A. The Executive shall receive
such retirement benefits as may be provided for him under the Company's
Retirement Plan, including any supplements the Company may adopt in that
connection.
B. The Company shall establish and maintain a trust fund
to fund the payment of all benefits to be paid to the Executive pursuant
to Sections 6 and 7 under the circumstances described in, and in
accordance with the terms of, a trust agreement substantially in the form
attached hereto as Exhibit A. The Company may add to said trust fund the
amounts of Deferred Compensation referred to in Section 4 in order to fund
the payments thereof as provided in said Section.
Section 8. Compensation from Other Employment. Any compensation
payable to the Executive pursuant to the provisions of Section 6 shall be
reduced by any amounts of compensation earned or received by the Executive
from any other employer for services rendered during the period for which
such payments by the Company are to be made thereunder.
Section 9. Limitation on Payments. A. Sections 280G and 4999 of
the Internal Revenue Code (the "Code") impose a 20% excise tax on
excessive compensation received by, and deny a deduction to the Company
for the amount of excess compensation paid to, employees who are officers,
shareholders or highly compensated individuals as a result of a change in
the ownership or effective control of the Company or in the ownership of a
substantial portion of the Company's assets. In general, payments to an
individual that are contingent on a Change in Control will not be treated
as excessive if such payments do not exceed three (3) times the average
annual compensation received by such individual over the five (5) years
preceding the Change in Control. The provisions that follow are designed
to maximize the amounts payable to the
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Executive under this Agreement in the event of a Change in Control, taking
into consideration the possible application of the foregoing Code
provisions.
B. Notwithstanding anything in this Agreement to the
contrary, in the event that it is determined that any payment by the
Company to the Executive or for the Executive's benefit, whether paid or
payable pursuant to the terms of this Agreement or otherwise, would be
taxable because of Section 4999 of the Code, then the aggregate present
value of amounts payable to the Executive or for the Executive's benefit
pursuant to this Agreement shall be reduced to the Reduced Amount unless
C. below applies. For purposes of this subparagraph, the "Reduced Amount"
shall be defined as an amount expressed in present value which maximizes
the amounts payable pursuant to this Agreement without causing any such
payments to be taxable to the Executive because of Section 4999 of the
Code.
C. If the Net After Tax Benefit of all amounts payable to
the Executive pursuant to this Agreement exceeds the Net After Tax Benefit
of the Reduced Amount, then this Section 9 shall not apply to limit any
amount payable to the Executive. "Net After Tax Benefit" means the amount
payable to the Executive or for the Executive's benefit pursuant to this
Agreement (whether the Reduced Amount or the full amounts payable to the
Executive under this Agreement), less the sum of (i) the amount of Federal
income taxes payable with respect to such amounts and (ii) the amount of
excise taxes payable on such amounts pursuant to Section 4999 of the Code,
if any. For purposes of this clause C., Federal income taxes payable in
respect of future payments shall be those prescribed by the Code at the
time the calculation is made for the periods in which the same shall be
payable.
D. The initial determination as to whether any reduction
in payments and benefits is necessary in order to comply with B. above
and, if so, the calculation of the Reduced Amount shall be made by the
Company and furnished to the Executive in writing within seven (7) days
following the date of termination of the Executive's employment. The
Company's determination and its calculation of the Reduced Amount will be
final and binding upon the Executive unless the Executive notifies the
Company within eight (8) days after the Executive receives the Company's
determination and calculation that the Executive disputes the same.
Within ten (10) days after the Executive so notifies the Company, the
Executive shall deliver to the Company a statement of the basis for the
Executive's opinion as to whether any reduction in payments and benefits
is necessary, pursuant to B. above and, if so, the Executive's calculation
of the Reduced Amount. If, within ten (10) days after the Company
receives such statement, the Company and the Executive are unable to agree
as to whether any reduction is necessary or as to the calculation of any
amounts under this Section 9, then the Company and the Executive shall,
within three (3) days thereafter, choose a nationally recognized
accounting firm to resolve any such dispute. Such accounting firm's
determination shall be made promptly and delivered to the Company and the
Executive within twenty (20) days of its appointment and shall be final
and binding on the parties. All costs incurred in connection with the
accounting firm's determination shall be borne by the Company.
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E. Within ten (10) days after the date a determination
and calculation of the Reduced Amount becomes final and binding in
accordance with D. above, the Executive may elect which portion of the
payments due him under the Agreement shall be eliminated or reduced to
meet such Reduced Amount (including meeting the Reduced Amount by reducing
the present value of any payment and benefits through deferral of the
payment date). If the Executive does not notify the Company of his
election within such ten (10)-day period, the Company shall have the right
to decide how the Reduced Amount will be met.
F. Pending a final and binding determination and
calculation of the Reduced Amount in accordance with this Section 9, the
Executive shall have the right to require the Company to pay to the
Executive all or any undisputed portion of the Reduced Amount, as
determined and calculated by the Company, that would be then due and
payable to the Executive pursuant to this Agreement. Such payment shall
be made by the Company within two (2) days after the date of receipt of
notice from the Executive requesting such payment.
G. The Company shall pay to the Executive or for the
Executive's benefit that portion of the Reduced Amount which is then due
and payable (less any amount previously paid by the Company pursuant to F.
above) within ten (10) days after receipt of the election by the Executive
described in E. above or, in the absence of such an election, within
fifteen (15) days after the date upon which any determination and
calculation of the Reduced Amount becomes final and binding in accordance
with D. above. The balance of the Reduced Amount shall be paid promptly
as the same becomes due and payable under this Agreement.
H. In the event that the Internal Revenue Service or a
court of competent jurisdiction makes a final determination that any
payments to the Executive under this Agreement are taxable to the
Executive pursuant to Section 4999 of the Code, and such payments should
not have been made under the terms of Sections 9.B. and C. hereof (such
taxable payments and benefits being referred to hereinafter as an
"Overpayment") or in the event that the Code shall be amended or final
regulations thereunder adopted and, as a result thereof, payments or
benefits previously made to the Executive under this Agreement should not
have been made under the terms of Sections 9.B. and C. and are thus
recharacterized as an Overpayment, the amount of such Overpayment shall be
treated for all purposes as a loan to the Executive which shall be
repayable by the Executive within thirty (30) days after demand by the
Company, together with interest at the applicable Federal rate specified
for a demand loan in Section 7872(f)(2) of the Code, compounded
semiannually. The foregoing provision relating to Overpayments shall be
applicable notwithstanding previous compliance by the Company and the
Executive with the requirements of this Section 9; provided, however, that
no such Overpayment shall be repaid by the Executive to the Company if and
to the extent that, despite making such repayment, the amount which is
subject to taxation under Section 4999 of the Code would not be reduced.
Section 10. Review of Agreement. The Compensation Committee of
the Board of Directors of the Company may consider such extension and
modification of the terms of this Agreement for a period or periods
subsequent to its expiration as it may deem appropriate at any time or
from time to time.
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Section 11. Waiver. The failure of either party to insist, in any
one or more instances, upon the performance of any of the terms, covenants
or conditions of this Agreement by the other party hereto, shall not be
construed as a waiver or as a relinquishment of any right granted
hereunder to the party failing to insist on such performance, or as a
waiver of the future performance of any such term, covenant or condition,
but the obligations hereunder of both parties hereto shall remain
unimpaired and shall continue in full force and effect.
Section 12. Successor; Binding Agreement. A. The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Company
would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness
of such succession shall be deemed to be a Change in Control of the
Company effective on the date of such succession. As used herein,
"Company" shall mean TBC Corporation and any successor to its business
and/or its assets as aforesaid which executes and delivers the agreement
provided for in this Section 12 or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law.
B. This Agreement and the obligations created hereunder
may not be assigned by the Executive.
Section 13. Notices. All notices required or permitted to be
given under this Agreement shall be in writing and shall be mailed
(postage prepaid via either registered or certified mail) or delivered, if
to the Company, addressed to:
TBC Corporation
0000 Xxxxxxx Xxxx Xxxxx
Post Office Box 18342
Memphis, Tennessee 38181-0342
Attention: President
and if to the Executive, addressed to:
Xx. Xxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Either party may change the address to which notices to it or him are to
be directed by giving written notice of such change to the other party in
the manner specified in this paragraph.
Section 14. Arbitration. Any controversy or claim arising out of
or relating to this Agreement, or the breach thereof, shall be settled by
arbitration in Memphis, Tennessee, in
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accordance with the Rules of the American Arbitration Association, and
judgment upon the award rendered by the Arbitrator(s) may be entered in
any court having jurisdiction thereof.
Section 15. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties have hereunto set their hands as of
the day and year first above written.
TBC CORPORATION
By /s/ Xxxxx X. XxXxxxxx
President and Chief Executive Officer
/s/ Xxxxx X. Xxxxxxx
XXXXX X. XXXXXXX (Executive)
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EXHIBIT A
TBC CORPORATION
TRUST AGREEMENT FOR XXXXX X. XXXXXXX
August 1, 1997
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TABLE OF CONTENTS
Page
ARTICLE I Name of Trust............................... 1
1.1 Name.................................. 1
1.2 Purpose............................... 1
ARTICLE II Definitions................................. 2
ARTICLE III Company Obligations......................... 3
ARTICLE IV Payment Schedules........................... 3
4.1 Payment Schedule...................... 3
4.2 Modified Payment Schedule............. 4
4.3 Withholdings.......................... 4
4.4 Further Assurances.................... 4
4.5 Distributions in the Event
of Taxability......................... 4
ARTICLE V The Trust Fund and Funding.................. 5
5.1 Receipt and Holding of
the Trust Funds....................... 5
5.2 Initial Funding of Trust.............. 5
5.3 Additional Funding; Excess Assets..... 5
5.4 Release of Trust Funds Unless
a Change of Control Occurs............ 6
5.5 Transfer to Another Trustee........... 6
ARTICLE VI Status of Trust............................. 6
6.1 Grantor Trust......................... 6
6.2 Subject to Claims Creditors
of the Company........................ 7
6.3 Notification of Bankruptcy
or Insolvency......................... 7
ARTICLE VII The Trustee's Accounting.................... 8
7.1 Books and Records..................... 8
7.2 Trustee's Report...................... 8
7.3 Additional Reports.................... 9
ARTICLE VIII Administration of the Trust Fund............ 9
8.1 Ownership and Investment
of the Trust Fund..................... 9
8.2 Powers of the Trustee................. 9
8.3 Situs of Assets....................... 12
8.4 Entire Agreement...................... 13
ARTICLE IX Relating to the Trustee..................... 13
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9.1 Liability of the Trustee.............. 13
9.2 Obligations under Law................. 13
9.3 Bond.................................. 13
9.4 Compensation.......................... 13
9.5 Indemnification....................... 14
ARTICLE X Missing Persons, Incapacitated Executives,
Directions and Notices...................... 14
10.1 Missing Persons....................... 14
10.2 Incapacity............................ 14
10.3 Form.................................. 14
10.4 Proof of any Matter................... 14
10.5 Absence of Directions................. 15
ARTICLE XI Resignation or Removal of Trustee........... 15
11.1 Successor Trustee..................... 15
11.2 Final Account......................... 15
11.3 Transfer and Discharge................ 15
11.4 Effective Date of Appointment
of Successor Trustee.................. 15
11.5 Merger or Consolidation............... 16
ARTICLE XII Protection for Third Persons................ 16
ARTICLE XIII Termination; Amendment; and Waiver.......... 16
13.1 Termination........................... 16
13.2 Amendment and Waiver.................. 16
ARTICLE XIV General Provisions.......................... 17
14.1 Tennessee Trust....................... 17
14.2 Severability.......................... 17
14.3 Arbitration........................... 17
14.4 Notices............................... 17
14.5 Trust Beneficiaries................... 18
14.6 Headings.............................. 18
14.7 Counterparts.......................... 18
14.8 Nonalienation of Benefits............. 18
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TBC CORPORATION
TRUST AGREEMENT FOR XXXXX X. XXXXXXX
THIS AGREEMENT is established effective as of the 1st of
August, 1997, by TBC CORPORATION (the "Company"), a Delaware corporation,
as grantor, and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, as trustee,
under the following circumstances:
(A) Simultaneously with the execution of this Agreement,
the Company is entering into an Amended and Restated Executive
Employment Agreement ("the Employment Agreement") with Xxxxx X.
Xxxxxxx("the Executive"). The Employment Agreement contains
provisions to pay the Executive compensation and benefits if the
Executive's employment with the Company is terminated for certain
reasons including, but not limited to, a Change of Control as
defined therein.
(B) Those compensation and benefit payments are not funded
or otherwise secured, and the Company desires by this Trust to
provide further assurance to the Executive that the provisions of
the Employment Agreement concerning termination of the Executive s
employment with the Company following a Change of Control of the
Company (as defined in Article II) will be satisfied and payments
will be timely made when due, by depositing assets for use in
making such payments, in trust, upon the occurrence of a Change of
Control or Potential Change of Control of the Company (as therein
defined), subject only to the claims of the Company's existing or
future general creditors in the event of the Company's insolvency
or bankruptcy as defined in Section 6.3.
NOW, THEREFORE, in consideration of the agreements
contained herein and for other good and valuable considerations, the
parties hereto agree as follows:
ARTICLE I
NAME OF TRUST
1.1 Name. The Trust created by this Agreement may be
referred to as the "TBC CORPORATION TRUST FOR XXXXX X. XXXXXXX".
1.2 Purpose. The Trust is established for the purposes
set forth in Preamble B to this Agreement.
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ARTICLE II
DEFINITIONS
The following terms used in this Trust have the following
meanings:
A. "Board" means the Board of Directors of the Company.
B. "Change of Control" means any change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act") as the same is construed by
the Securities and Exchange Commission on the date of execution of this
Agreement or in accordance with any change made with respect to said Item
or construction thereof deemed more favorable by the Executive; provided
that, without limitation, such a change in control shall be deemed to have
occurred if (i) any "person" (as such term is defined in Sections 13(d)
and 14(d)(2) of the Exchange Act), other than the Executive and/or an
entity then controlled by the Executive or the Company, is or becomes the
beneficial owner, directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's
then outstanding securities; (ii) during any period of two consecutive
years, individuals who at the beginning of such period constitute the
Board cease for any reason to constitute at least a majority thereof
unless the election, or the nomination for election by the Company's
stockholders, of each new Director was approved by a vote of at least two-
thirds of the Directors then still in office who were Directors at the
beginning of the period; (iii) the Company merges or consolidates with
another corporation and the Company or an entity controlled by the Company
or the Executive immediately prior to the merger or consolidation is not
the surviving entity; or (iv) a sale, lease, exchange, or other
disposition of all or substantially all of the assets of the Company takes
place.
C. "Company" means TBC CORPORATION, a Delaware
corporation, and any successor to such entity.
D. "Executive" means Xxxxx X. Xxxxxxx.
E. "Fiscal Year" means the fiscal year of the Company.
F. "Payment Schedule" has the meaning ascribed to it in
Section 4.1.
G. "Potential Change of Control" means and shall be
deemed to have occurred if (i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change of
Control of the Company, (ii) any
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person, other than the Company, the Executive or an entity controlled by
the Company or the Executive, publicly announces an intention to take or
to consider taking actions which, if consummated, would constitute a
Change of Control of the Company, (iii) any person, other than the
Executive and/or any entity controlled by the Executive or the Company,
increases his beneficial ownership of the combined voting power of the
Company's then outstanding securities by 5% or more over the percentage so
owned by such person on the date hereof and, after such increase, is the
beneficial owner, directly or indirectly, of securities of the Company
representing 20% or more of such securities; or (iv) the Board adopts a
resolution to the effect that, for purposes of this Agreement, a Potential
Change of Control of the Company has occurred.
H. "Trust" means the trust created by this Agreement.
I. "Trust Fund(s)" has the meaning ascribed to it in
Section 5.1.
J. "Trustee" means any trustee from time to time serving
as the trustee of the Trust.
ARTICLE III
COMPANY OBLIGATIONS
The Company shall continue to be liable to make all
payments to the Executive required under the terms of the Employment
Agreement to the extent such payments have not been made pursuant to this
Trust. Payments made from Trust Funds to the Executive pursuant to
Article IV shall, to the extent of such payments, satisfy the Company's
obligation to pay benefits to the Executive under the Employment
Agreement.
ARTICLE IV
PAYMENT SCHEDULES
4.1 Payment Schedule. Upon the occurrence of the
termination of Executive's employment with Company following any Change of
Control or Potential Change of Control, the Company shall deliver to the
Trustee a payment schedule (the "Payment Schedule") showing as to the
Executive the dates payments are to be made to the Executive and the
amount of each such payment or setting forth a formula or instructions
acceptable to the Trustee for determining the amounts so payable and the
payment dates. The Payment Schedule shall also be delivered by the
Company to the Executive.
4.2 Modified Payment Schedules. A Modified Payment
Schedule shall be delivered by the Company to the Trustee and to
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the Executive each time that additional amounts are required to be paid by
the Company to the Trustee under Section 5.3 or upon the occurrence of any
event requiring a new Payment Schedule under Section 4.1. The Trustee
shall make payments from the Trust Funds to the Executive in accordance
with the provisions of the applicable Payment Schedule. In the event that
the Executive reasonably believes that the Payment Schedule, as modified,
does not properly reflect the amount payable to the Executive and/or dates
of Payment under the Employment Agreement, the Executive shall be entitled
to deliver to the Trustee written notice ("the Executive's Notice")
setting forth payment instructions for the amount the Executive believes
is payable under the relevant terms of the Agreement. The Executive shall
also deliver a copy of the Executive's Notice to the Company within three
(3) business days of delivery to the Trustee. Unless the Trustee receives
written objection from the Company within thirty (30) business days after
receipt by the Trustee of such notice, the Trustee shall make the payment
in accordance with the payment instructions set forth in the Executive's
Notice.
4.3 Withholdings. The Trustee shall be permitted to
withhold from any payment due to the Executive hereunder the amount
required by law to be so withheld under Federal, state and local wage
withholdings requirements or otherwise, and shall pay over to the
appropriate government authority the amounts so withheld. The Trustee may
rely on instructions from the Company (consistent with the Executive's
instructions to the Company) as to any required withholding and shall be
fully protected under Section 9.5 in relying on such instructions.
4.4 Further Assurances. The Trustee shall, at any time
and from time to time, administer this Trust as may be necessary or proper
to effectuate the purposes of this Trust. If the Trust receives an
unqualified opinion of tax counsel selected by the Trustee, which opinion
states that the Executive is subject to Federal income tax on amounts held
in Trust prior to the distribution to the Executive of such amounts, the
Trustee shall, to the extent practicable, take such action and administer
the Trust Fund in such a manner so as to prevent the Trust Fund from
becoming immediately taxable income to the Executive before making any
distributions pursuant to Section 4.5, provided that the Trustee shall not
return any portion of the Trust Fund to the Company.
4.5 Distributions in the Event of Taxability. In the
event of any final determination by the Internal Revenue Service or a
court of competent jurisdiction, which determination is not appealable or
the time for appeal or protest of which has expired, or the receipt by the
Trustee of a substantially unqualified opinion of tax counsel selected by
the Trustee, which determination determines, or which opinion opines, that
the Executive is subject to Federal income taxation on amounts held
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in the Trust prior to the distribution to the Executive of such amounts
and no curative action is available under Section 4.4, the Trustee shall,
on receipt by the Trustee of such opinion or notice of such determination,
pay to the Executive the portion of the Trust assets includable in the
Executive's Federal gross income; provided that, as a condition of
receiving such payment, the Executive has delivered to the Trustee a
written agreement stating that the payment being made is in satisfaction
of the obligations of the Company due to him in respect of which the
payment is made, after taking into consideration that such payment is
being made prior to the required distribution date, and the Company has
concurred in such agreement, which concurrence shall not be unreasonably
withheld.
ARTICLE V
THE TRUST FUND AND FUNDING
5.1 Receipt and Holding of the Trust Funds. The Trustee
will accept and hold all contributions, insurance contracts, insurance
policies and other property transferred and delivered to the Trustee by
the Company or at the Company's direction. All contributions and property
received by the Trustee, plus income and appreciation, constitute the
trust fund (the "Trust Fund(s)").
5.2 Initial Funding of Trust. Concurrently with the
execution of this Agreement, the Company is delivering to the Trustee the
sum of One Hundred Dollars to be held in trust hereunder. Upon the
earlier of the occurrence of any Change of Control or Potential Change of
Control, the Company shall contribute to the Trust, in cash or other
property, the amount determined under accepted actuarial principles to be
necessary to fund the amounts payable to the Executive under the
Employment Agreement in accordance with a Payment Schedule to be delivered
to the Trustee pursuant to Section 4.1, assuming that, for purposes of
such Payment Schedule, the Executive s employment with the Company had
been terminated on the day following the occurrence of the Change of
Control or Potential Change of Control.
5.3 Additional Funding; Excess Assets. Unless the Trust
Funds have been released to the Company pursuant to Section 5.4, the
Company shall, as soon as practicable after the end of each Fiscal Year,
recalculate the amount determined under accepted actuarial principles to
be necessary to fund any amounts payable to the Executive under the
Employment Agreement, in accordance with any Payment Schedule delivered to
the Trustee pursuant to Sections 4.1 and 4.2 during the most recently
completed Fiscal Year (herein referred to as the "Aggregate Payment
Obligation"). If the Aggregate Payment Obligation exceeds the fair market
value of the Trust Funds at the end of
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the most recently completed Fiscal Year, then there exists a funding
deficiency to the extent of such excess; and the Company shall contribute
to the Trustee no later than 90 days after the end of such Fiscal Year
additional cash or property having a fair market value equal to the amount
of the funding deficiency. If the fair market value of the Trust Funds at
the end of the most recently completed Fiscal Year is more than 125% of
the Aggregate Payment Obligation, then there is an overfunding to the
extent of such excess; and the Trustee shall as soon as practicable after
the determination that an overfunding exists distribute to the Company
cash or other property having a fair market value equal to the amount of
the overfunding in excess of such 125%.
5.4 Release of Trust Funds Unless Change of Control
Occurs. Any funds delivered to the Trustee pursuant to Section 5.2
because of the occurrence of a Potential Change of Control, together with
any assets in the Trust Fund in excess of $100, shall be returned to the
Company six months after the date of such delivery, unless a Change of
Control shall have occurred. Each such initial six-month period shall be
renewed for an additional six-month period, if any Potential Change of
Control occurs during such initial six-month period. The Company shall
notify the Trustee of the occurrence of a Change of Control or Potential
Change of Control, and the Trustee may rely on such notice or on any other
actual notice satisfactory to the Trustee of such Change or Potential
Change which the Trustee may receive. Notwithstanding the foregoing, the
Trustee shall have no duty or obligation to make any independent
determination that such Change or Potential Change has occurred. In the
event Trust Funds are released to the Company pursuant to this Section
5.4, all Payment Schedules delivered to the Trustee prior thereto pursuant
to Section 4.1 shall be returned to the Company and be of no further force
or effect.
5.5 Transfer to Another Trustee. Upon the Executive's
prior written consent, the Company may direct the Trustee to transfer the
Trust Fund to a successor trustee as set forth in Section 11.1. The
Trustee immediately will comply with that direction. When that transfer
is completed, the Trustee will be relieved from all further obligations in
connection with the Trust Fund.
ARTICLE VI
STATUS OF TRUST
6.1 Grantor Trust. The Trust is part of the Company's
program established for the purpose of providing certain compensation and
retirement benefits to the Executive, and is intended to be exempt from
the participation, vesting, funding and fiduciary requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Company
intends the Trust
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to be treated as a grantor trust within the meaning of Section 671 of the
Internal Revenue Code and all income attributable to the Trust Fund shall
be reported by the Company. The Trust Fund shall at all times be subject
to the claims of the creditors of the Company as set forth in Section 6.2.
6.2 Subject to Claims of Creditors of the Company. It is
the intent of the parties hereto that the Trust Fund is and shall remain
at all times subject to the claims of the creditors of the Company in the
event of the Company's insolvency or bankruptcy as set forth in this
Article VI, including, without limitation, its general creditors
(including the Executive). Accordingly, the Company shall not create a
security interest in the Trust Fund in favor of the Executive or any
creditor. If the Trustee receives the notice provided for in Section 6.3,
or otherwise receives actual notice that the Company is insolvent or
bankrupt as defined in Section 6.3, the Trustee will make no further
distributions of the Trust Fund to the Executive but shall deliver the
Trust Funds only as a court of competent jurisdiction, or duly appointed
receiver or other person authorized to act by such a court, may direct, in
order to make the Trust Fund available to satisfy the claims of the
Company's creditors, including, without limitation, its general creditors.
The Trustee shall resume distribution of the Trust Fund to the Executive
under the terms hereof, upon no less than thirty (30) days' advance notice
to the Company, if it determines that the Company was not, or is no
longer, bankrupt or insolvent. Unless the Trustee has actual notice of
the Company's bankruptcy or insolvency, the Trustee shall have no duty to
inquire whether the Company is bankrupt or insolvent.
6.3 Notification of Bankruptcy or Insolvency. The
Company, through its Board of Directors and Chief Executive Officer, shall
advise the Trustee promptly in writing of the Company's bankruptcy or
insolvency. The Company shall be deemed to be bankrupt or insolvent upon
the occurrence of any of the following:
(i) The Company shall make an assignment for the
benefit of creditors, file a petition in bankruptcy, petition or
apply to any tribunal for the appointment of a custodian, receiver,
liquidator, sequestrator, or any trustee for it or a substantial
part of its assets, or shall commence any case under any
bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution, or liquidation law or statute of any jurisdiction
(federal or state), whether now or hereafter in effect; or if there
shall have been filed any such petition or application, or any such
case shall have been commenced against it, in which an order for
relief is entered or which remains undismissed;
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or the Company by any act or omission shall indicate its consent
to, approval of or acquiescence in any such petition, application
or case or order for relief or to the appointment of a custodian,
receiver or any trustee for it or any substantial part of its
property, or shall suffer any such custodianship, receivership, or
trusteeship to continue undischarged; or
(ii) The Company shall generally not pay its debts as
such debts become due or shall cease to pay its debts in the
ordinary course of business; or
(iii) The sum of the Company's debts is greater than all
its property at a fair valuation; or
(iv) The present salable value of the Company's assets
is less than the amount that would be required to pay the probable
liability on its existing debts as they become absolute, matured,
due and payable.
ARTICLE VII
THE TRUSTEE'S ACCOUNTING
7.1 Books and Records. The Trustee will keep accurate
and detailed accounts of all investments, receipts, disbursements and
other transactions in respect of the Trust Fund. Those accounts and
related records may be inspected by any person designated by the Company.
The Trustee will retain those records and supporting data for the period
required by law. All Trust assets may be commingled for purposes of
investment. For recordkeeping purposes only, an account will be
maintained for the Executive. The account will be credited with all
contributions relating to the Executive and will be debited with all
payments to the Executive.
7.2 Trustee's Report. Within 60 days after the end of
each Fiscal Year, the Trustee shall file a written report with the Company
containing:
(a) A description of investments, receipts, disbursements
and other transactions effected by the Trustee during the most
recently completed Fiscal Year;
(b) An exact description of any asset transferred to the
Trustee or transferred by the Trustee to any other person during
such Fiscal Year;
(c) An exact description of assets sold or
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purchased by the Trustee during such Fiscal Year, the
cost of each item purchased and the net proceeds of
each item sold;
(d) An exact description of all assets held by the Trustee
as of the close of business on the last day of such Fiscal Year,
and the cost and fair market value of each item (other than
insurance contracts) determined as of the same date; and
(e) Any other information required by law to be filed on
behalf of the Trust.
The information described in subsections (a), (b) and (c),
above, may be given in the form of monthly or quarterly reports, if those
reports, taken together, contain the required information.
7.3 Additional Reports. In addition to the report
required under Section 7.2 above, the Trustee shall make any interim
reports reasonably requested by the Company.
ARTICLE VIII
ADMINISTRATION OF THE TRUST FUND
8.1 Ownership and Investment of the Trust Fund. The
Trustee is the legal owner of all Trust Fund assets and, subject to this
Article, shall invest and reinvest the Trust Fund. Any amounts reasonably
necessary to meet contemplated payments or to be transferred from the
Trust Fund may be deposited temporarily in the commercial department of
any bank or trust company. The Trustee will not be liable for any
interest on those deposits except for interest actually paid by the bank
or trust company or, if the deposit is with the Trustee's own commercial
department, interest at the legally permitted rate agreed to by the
Trustee and the Company. Alternatively, the Trustee may make temporary
deposits in governmental obligations, certificates of deposit, commercial
paper, commercial paper master notes, cash management funds, or a common
trust fund or a cash management fund maintained by the Trustee for
temporary cash investments.
8.2 Powers of the Trustee. Subject to this Article,
Article V and Sections 9.1 and 9.2 and in addition to the powers generally
given to trustees by law, the Trustee may:
(a) Invest and reinvest the Trust Fund in securities or
other property, real or personal, wherever located, and whether or
not productive of income, which the Trustee believes advisable,
including capital, common and preferred shares of stock (including,
if directed by the Company, investment of up to 10% of the
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Trust Funds in shares of stock and other securities issued by the
Company, the Trustee or any entity related through common ownership
to the Trustee), personal, corporation and governmental
obligations, whether or not secured; mortgages, leaseholds, fees
and other interests in realty; oil, gas or mineral properties,
rights, royalties, payments or other interests in that property;
contracts, conditional sale agreements, choses in action; trust and
participation certificates, or other evidences of ownership, part
ownership, interest or part interest. Except as provided in
Section 8.2, the Trustee will not be limited or restricted by any
statute or rule of law, now or hereafter in effect, governing trust
investments, and may invest and reinvest through the medium of any
combined, common, collective or commingled trust fund or funds
maintained by the Trustee or any entity related through common
ownership with the Trustee, the terms of which are incorporated
into this Trust, or commingle and invest the Trust Fund with other
trust funds created by the Company under other trusts. An
investment will not be improper or imprudent merely because the
Trustee participated in the issuance, underwriting or original sale
of the acquired property or because the proceeds were to be used to
satisfy obligations of the issuer or seller to the Trustee.
(b) Form or acquire an interest in a corporation or make
use of a corporation for the purpose of investing in and holding
title to any property.
(c) Except as limited by Section 8.2, hold property in the
form received (including shares of stock and other securities
issued by the Company, the Trustee or any entity related through
common ownership to the Trustee) for as long as the Trustee
believes advisable, regardless of the character of that property,
and regardless of whether its acquisition by a trustee is
authorized by law.
(d) Sell or contract to sell, exchange or otherwise dispose of or
grant options on any asset of the Trust Funds, at public auction,
by private contract, pursuant to option, or otherwise, upon terms
and conditions which at the time the Trustee believes appropriate,
and make, execute and deliver instruments necessary or proper to
complete the transaction.
(e) Hold in its own or in nominee name any asset of the
Trust Funds.
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(f) Exercise or sell, for adequate consideration,
conversion or subscription rights under any Trust Fund asset, and
use that portion of the Trust Funds necessary to exercise those
rights.
(g) Vote or refrain from voting all shares of stock or
securities (including, at the direction of the investment committee
established under the Company's Retirement Plan, shares of stock
and other securities issued by the Company, the Trustee or any
entity related through common ownership to the Trustee) in person
or by proxy (including special, limited or general proxies, with or
without power of substitution) and, as stock or security holder,
execute and deliver proxies to one or more nominees. The Trustee
may dissent from or consent to, approve, authorize, and become a
party to any reorganization, consolidation, merger, sale or lease
of corporate property or other corporate readjustment, including
dissolution or liquidation, and execute appropriate instruments.
In participating in any corporate action, the Trustee may act as if
it is the absolute owner of the shares of stock or securities and
may deposit those certificates of ownership with any committee or
depository designated in the plan or agreement governing that
corporate action, and pay from the Trust Fund any charges or
assessments imposed by that plan or agreement and may accept and
continue to hold any property received by reason of participation
in that corporate action.
(h) Borrow money for Trust purposes in amounts, from any
person (except itself) and on the terms and conditions which the
Trustee deems advisable. The Trustee will issue its promissory
note as Trustee and secure repayment by mortgaging, pledging or
otherwise hypothecating all or any part of the Trust Funds
(including, if directed by the Company, shares of stock and other
securities issued by the Company or any entity related through
common ownership to the Trustee).
(i) Establish whether any trust asset is to be treated as
principal or income and charge or apportion expenses, taxes and
losses to principal or income, as the Trustee believes appropriate.
However, gains or profits arising from the sale or other
disposition of assets will become a part of principal, and the
Trustee will not be required to set aside any part of income to
absorb or make good any losses arising from the disposition of any
asset. Moreover, all liquidating payments or liquidating dividends
will become part of principal and stock dividends will be allocated
to principal or income depending on the type of
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distribution represented by the dividend; regular or ordinary cash
dividends always will be treated as income. Also, the Trustee need
not amortize any premium paid to acquire property or to set aside
any part of the income to absorb a premium; if the Trustee acquires
any investment at a discount or at a price less than par value, it
need not treat or accrue that discount as income.
(j) Modify the terms of any obligation forming part of the
Trust Funds, and release any security for or guaranty of any
obligation; foreclose any mortgage securing any obligation, and
purchase the mortgaged property at the foreclosure sale, or acquire
the property by deed, conveyance or assignment from the mortgagor
without foreclosure, and retain property bought in under
foreclosure or acquired without foreclosure and dispose of it on
the terms and conditions which the Trustee believes appropriate.
(k) Abandon, adjust, arbitrate, compromise, or otherwise
settle any obligation or liability due to or from it as Trustee,
including any tax claim, and/or enforce or contest any claim in
legal or administrative proceedings. The Trustee will not be
required to contest any claim unless it has been indemnified
against the costs and expenses of that action or unless available
Trust Fund assets are sufficient to pay those expenses.
(l) Compensate, from the Trust Funds, agents, accountants,
brokers and counsel (who may be counsel for the Company) and other
assistants and advisors which it believes are necessary or
desirable for the proper administration of the Trust Fund.
(m) Temporarily deposit uninvested funds in a commingled
temporary deposit medium which is composed of certificates of
deposit or other obligations issued by the Trustee, or a cash
management fund maintained by the Trustee.
(n) Do all other acts, not specifically mentioned above
which are necessary to administer the Trust Fund and to carry out
the purposes of the Trust.
8.3 Situs of Assets. Except as permitted by law, the
Trustee may not maintain in the Trust Fund any assets located outside the
jurisdiction of the district courts of the United States.
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8.4 Entire Agreement. The Trustee will have only those
powers, duties, or responsibilities set forth in this Agreement.
ARTICLE IX
RELATING TO THE TRUSTEE
9.1 Liability of the Trustee. The Trustee will exercise
its powers and perform its duties with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with those matters would use in the
conduct of an enterprise of a like character and with like aim. The
Trustee also will diversify Trust Fund investments to minimize the risk of
large loss unless under the circumstances the Trustee believes it clearly
would be prudent not to diversify. Wherever this Trust Agreement provides
that the Trustee must follow directions of the Company or that the Trustee
has no duty or power concerning a matter, the Trustee will not be liable
for any harm caused by a direction or lack of a direction or by any
exercise or non-exercise of power by another unless:
(a) the Trustee knowingly participates in or knowingly
undertakes to conceal an act or omission of another fiduciary with
respect to the Trust; or
(b) by the Trustee's failure to act in accordance with this
Section, the Trustee has enabled another fiduciary to breach a
fiduciary duty; or
(c) the Trustee has knowledge of a breach of fiduciary duty
which resulted in harm or injury and does not make reasonable
efforts under the circumstances to remedy the breach.
9.2 Obligations under Law. Regardless of any general or
specific power or authority granted to it, the Trustee may not engage in
any transaction, exercise any power or perform any duty under this Trust
in violation of the Internal Revenue Code, the Employee Retirement Income
Security Act, as amended, or any regulations or rulings issued under those
laws.
9.3 Bond. Unless required by law, the Trustee is not
required to furnish bond for the faithful performance of its duties.
9.4 Compensation. The Trustee will be compensated
reasonably as agreed to by the Company and the Trustee. Such compensation
and all reasonable expenses of administration will be paid by the Trustee
out of the Trust Funds unless paid directly by the Company or unless the
Company otherwise provides the needed funds to the Trustee.
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9.5 Indemnification. The Company agrees to indemnify and
hold harmless the Trustee from and against any and all damages, losses,
claims or expenses as incurred, including expenses of investigation and
fees and disbursements of counsel to the Trustee and any taxes imposed on
the Trust Fund or income of the Trust (the "Indemnified Amounts"), arising
out of or in connection with the performance by the Trustee of its duties
hereunder provided the Indemnified Amounts do not arise out of, or are
connected with, any of the foregoing as to which the Trustee may be liable
under subparagraphs (a), (b) or (c) of Section 9.1. Any amount payable to
the Trustee under this Section 9.5 and not previously paid by the Company
shall be paid by the Company promptly upon demand therefor by the Trustee
or, if the Trustee so chooses in its sole discretion, from the Trust Fund.
In the event that payment is made hereunder to the Trustee from the Trust
Fund, the Trustee shall promptly notify the Company in writing of the
amount of such payment. The Company agrees that, upon receipt of such
notice, it will deliver to the Trustee to be held in the Trust an amount
in cash or other property equal to any payments made from the Trust Fund
to the Trustee pursuant to this Section 9.5. The failure of the Company
to transfer any such amount shall not in any way impair the Trustee's
right to indemnification pursuant to this Section 9.5.
ARTICLE X
MISSING PERSONS, INCAPACITATED EXECUTIVES,
DIRECTIONS, AND NOTICES
10.1 Missing Persons. If any payment to be made by the
Trustee to the Executive is not claimed or accepted by the Executive, the
Trustee shall notify the Company. The Trustee shall not have any
obligation to search for or ascertain the whereabouts of the Executive.
10.2 Incapacity. While the Executive is under a legal
disability or, in the Trustee's opinion, in any way is incapacitated so as
to be unable to manage his financial affairs, the Trustee may make any
required distribution to the Executive by making it (i) directly to the
Executive, (ii) to a legal guardian of the Executive, or (iii) in such
other manner as the Trustee deems in the best interest of the Executive.
10.3 Form. All directions, notices, certifications and
amendments to the Trust to be given by the Company will be in writing
signed on behalf of the Company.
10.4 Proof of any Matter. If required by the Trustee,
any matter may be proved conclusively by certification by the Company.
The Trustee also may accept or require any other or further evidence it
believes to be sufficient or necessary.
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10.5 Absence of Directions. If the Trustee believes that
it must take action under this Trust, it may act in its sole discretion
unless direction is provided in this Trust.
ARTICLE XI
RESIGNATION OR REMOVAL OF TRUSTEE
11.1 Successor Trustee. The Trustee may resign and be
discharged from its duties hereunder at any time by giving notice in
writing of such resignation to the Company and the Executive specifying a
date (not less than thirty (30) days after the giving of such notice) when
such resignation shall take effect. Promptly after such notice, the
Company shall appoint a successor trustee to which the Executive has no
reasonable objection, such trustee to become Trustee hereunder upon the
resignation date specified in such notice. The Trustee shall continue to
serve until its successor accepts the trust and receives delivery of the
Trust Fund. The Company may at any time substitute a new trustee by giving
thirty (30) days notice thereof to the Trustee then acting. The Trustee
and any successor thereto appointed hereunder shall be a commercial bank
which is not an affiliate of the Company, but which is a national banking
association or established under the laws of one of the states of the
United States, and which has equity in excess of $50,000,000.
11.2 Final Account. If the Trustee resigns or is
removed, and unless the Company accepts without exception the Trustee's
final account, the Trustee (or its representative) may settle its account
either (a) by beginning an action to procure a judicial settlement or (b)
by agreeing on a settlement with the Company.
11.3 Transfer and Discharge. If a successor trustee is
appointed, the Trustee will transfer the Trust Fund to the successor along
with true copies of all relevant records reasonably requested by the
successor. The Trustee also will execute all documents necessary to the
transfer of the Trust Fund. When it has completed those actions, the
Trustee will not be further accountable for any matters covered in its
accounting.
11.4 Effective Date of Appointment of Successor Trustee.
Appointment of a successor trustee will be effective when it delivers to
the Company and to the former trustee written acceptance of the
appointment. When delivered, this Trust will be interpreted as if the
successor trustee had been originally named Trustee. However, the
successor trustee will not be liable or responsible for anything done or
omitted in the administration of the Trust before its appointment.
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11.5 Merger or Consolidation. If the Trustee engages in
a corporate reorganization, the resulting corporation automatically will
be the Trustee's successor.
ARTICLE XII
PROTECTION FOR THIRD PERSONS
Protection for Third Persons. In dealing with the
Trustee, no one other than the Company is required to inquire into the
Trustee's authority to take any action authorized by this Trust. All
persons may assume that the Trustee is authorized to take any action which
it undertakes and will not be liable for any act done under written
direction of the Trustee. Also, all persons may assume that the Trustee
is authorized to receive any money or property paid to the Trustee, or
paid under the Trustee's written direction. Written certification by the
Company of the Trustee's name will be conclusive evidence that the Trustee
is qualified to act as Trustee at the date of that certification.
ARTICLE XIII
TERMINATION; AMENDMENT; AND WAIVER
13.1 Termination. This Trust shall be terminated upon
the earlier of (i) the exhaustion of the Trust Fund, or (ii) the final
payment of all amounts payable to the Executive pursuant to
Sections 6 and 7 of the Agreement. Promptly upon termination of this
Trust, any remaining portion of the Trust Funds shall be paid to the
Company.
13.2 Amendment and Waiver. This Trust is irrevocable and
may not be amended except by an instrument in writing signed on behalf of
the parties hereto together with the written consent of the Executive.
The parties hereto, together with the consent of the Executive, may at any
time waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto and the Executive to
any such waiver shall be valid if set forth in an instrument in writing
signed by or on behalf of such party and the Executive. Notwithstanding
the foregoing, any such amendment or waiver may be made by written
agreement of the parties hereto without obtaining the consent of the
Executive if such amendment or waiver does not adversely affect the rights
of the Executive hereunder. No amendment or waiver relating to this Trust
may be made which affects the Executive unless the Executive has agreed in
writing to such amendment or waiver.
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ARTICLE XIV
GENERAL PROVISIONS
14.1 Tennessee Trust. The Trust will be construed and
enforced according to the laws of the State of Tennessee and the United
States.
14.2 Severability. In the event that any provision of
this Agreement or the application thereof to any person or circumstances
shall be determined by a court of proper jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those
as to which it is held invalid or unenforceable, shall not be affected
thereby, and each provision of this Agreement shall be valid and enforced
to the fullest extent permitted by law.
14.3 Arbitration. Any dispute between the Executive and
the Company or the Trustee as to the interpretation or application of the
provisions of this Trust and amounts payable hereunder shall be determined
exclusively by binding arbitration in Memphis, Tennessee, in accordance
with the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitration award in any court of competent
jurisdiction.
14.4 Notices. Any notice, report, demand or waiver
required or permitted hereunder shall be in writing and shall be given
personally or by prepaid registered or certified mail, return receipt
requested (except that reports may be sent by ordinary mail), addressed as
follows:
If to the Company: TBC Corporation
0000 Xxxxxxx Xxxx Xxxxx
P. O. Xxx 00000
Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: Secretary
If to the Trustee: First Tennessee Bank National
Association
Personal Trust Division
P. O. Xxx 00
Xxxxxxx, Xxxxxxxxx 00000
If to the Executive: Xxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
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A notice shall be deemed received upon the date of
delivery if given personally or, if given by mail, upon the receipt
thereof.
14.5 Trust Beneficiaries. The Executive is the intended
beneficiary under this Trust, and shall be entitled to enforce all terms
and provisions hereof with the same force and effect as if such person had
been a party hereto.
14.6 Headings. The headings and subheadings in this
Agreement are inserted for convenience of reference only and are not to be
considered in the construction of its provisions.
14.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which is an original; all counterparts
constitute the same instrument, sufficiently evidenced by any one
counterpart.
14.8 Nonalienation of Benefits. The Executive's interest
under the Trust or right to receive any payment or distribution under the
Trust is not subject in any manner to sale, transfer, assignment, pledge,
attachment, garnishment or other alienation or encumbrance of any kind,
nor may such interest or right to receive a payment or distribution be
taken, voluntarily or involuntarily, for the satisfaction of the
obligations or debts of, or other claims against, the Executive or his
beneficiary, including claims for alimony, support, separate maintenance
and claims in bankruptcy proceedings.
IN WITNESS WHEREOF, the Company and the Trustee have
caused this instrument to be executed as of the 1st day of August, 1997.
FIRST TENNESSEE BANK
NATIONAL ASSOCIATION TBC CORPORATION
By___________________________ By_____________________________
Title: President and Chief Executive
Officer
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