EXHIBIT 10.28
ADP PROTOTYPE PLAN MID-MARKET TRUST AGREEMENT
TO BE PREPARED AND SIGNED IN DUPLICATE
AGREEMENT dated August 9, 2001 between Tandy Brands Accessories, Inc. with
offices at 000 Xxxx Xxxxx Xxxx., Xxxxx 000 Xxxxxxxxx, Xxxxx 00000 (the
"Company") and STATE STREET BANK AND TRUST COMPANY, as trustee (the "Trustee"),
with offices located at 000 Xxxxxxx Xxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000.
This Agreement establishes a trust fund (the "Trust") forming part of the Tandy
Brands Accessories, Inc. Employee Investment Plan [insert name of plan]
established by the Company (the "Plan").
The Company and the Trustee agree as follows:
ARTICLE 1. DEFINITIONS
1.1 DEFINITIONS.
The following terms, when used herein, shall have the meanings set
forth below:
"Account" or "Plan Account" means the account established under the
Plan for each Participant or Beneficiary with respect to such Participant's or
Beneficiary's total interest under the Plan.
"Administrative Committee" means a committee of individuals appointed
by the company to serve as Plan administrator.
"ADP" means ADP, Inc. and as the context indicates, its affiliates,
successors and assigns.
"Beneficiary" means the person (or entity) to whom all or a portion of
a deceased Participant's interest in the Plan is payable as provided for in the
Plan.
"Board of Directors" means, in the case of a corporation, the Company's
board of directors or other governing body. In the case of a partnership, a sole
proprietorship, limited liability company or other entity, the term Board of
Directors shall refer to the Company's general partner, sole proprietor, or the
person or body of persons who are authorized to take such action pursuant to the
governing documents of such entity or applicable law.
"Code" means the Internal Revenue Code of 1986, as it is or has been
amended from time to time.
"Direct Rollover" means a payment by the Plan to an "eligible
retirement plan" as defined in Code Section 402(c)(8) specified by the
Participant, the Participant's surviving spouse, or the Participant's former
spouse who is the alternate payee under a "qualified domestic relations order"
as defined in Code Section 414(p), as applicable.
"Eligible Employee" means any employee of the Company or a
Participating Affiliate who is defined in the Plan as within a classification of
employees eligible to participate in the Plan provided that the employee meets
the age, service or other requirements for participation provided for under the
Plan.
"Employer Stock" means stock issued by the Company or any other entity
that meets the definition of an "affiliate" of the Company under Section 407 of
ERISA.
"Employer Stock Fund" means an Investment Fund invested primarily in
Employer Stock.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
it is or has been amended from time to time.
"GIC" means a guaranteed investment contract issued by an insurance
company or other financial institution.
"Investment Fund" means an investment fund selected by the Company for
the investment of Plan assets.
"Investment Manager" means an entity that has the power to manage,
acquire, or dispose of Plan assets and acknowledges fiduciary responsibility to
the Plan in writing. Such entity must be a person, firm, or corporation
registered as an investment adviser under the Investment Advisers Act of 1940,
as amended, a bank, or an insurance company or the entity that meets the
definition of "investment manager" under Section 3(38) or ERISA.
"Named Fiduciary" means either the Company or the Plan Administrator,
whichever is designated in the Plan document as responsible for a particular
duty or function described in this Agreement. If the Plan document does not
designate a particular party as responsible for a particular duty, Named
Fiduciary shall mean the Company.
"Participant" means any Eligible Employee who has satisfied the
requirements for participation set forth in the Plan and has not for any reason
become ineligible to participate further in the Plan. The term Participant shall
be considered to refer also to a Beneficiary where the context so requires.
"Participant Affiliate" means any of the following entities that adopts
and has not terminated participation in or withdrawn from the Plan: any
corporation which is a member of a "controlled group of corporations (as defined
in Code Section 414(b)) that includes the Company; any trade or business under
"common control" (as defined in Code Section 414(c) with the Company; any
organization that is a member of an "affiliated service group" (as defined in
code Section 414(m) that includes the Company; or any other entity required to
be aggregated with the company pursuant to regulations promulgated by the
Secretary of the Treasury under Code Section 414(o).
"Plan" means the employee benefit plan qualified under section 401(a)
of the Code of the Company that has adopted this Trust as a funding vehicle.
"Plan Administrator" and shall have the meaning as set forth in section
414(g) of the Internal Revenue Code, which may be an Administrative Committee
appointed by the Company to act as Plan Administrator.
"Prototype Plan" means a plan maintained by the Company that is adopted
in the form of a "prototype plan," as defined in Revenue Procedure 2000-20 (or
any future guidance published by the Internal Revenue Service) for which the
Sponsor or one of its affiliates serves as the sponsoring organization.
"Rollover Contribution" means an amount received from a plan that
qualifies under Code Section 401(a), or any other plans (including conduit
individual retirement accounts) from which distributions are eligible to be
rolled over into this Plan pursuant to Code Section 402(c).
"Sponsor" means Automatic Data Processing Federal Credit Union, in its
capacity as the sponsoring organization of any prototype defined contribution
plan adopted by the Company.
"Transfer Contribution" means an amount transferred on behalf of an
Eligible Employee to the Plan in a trust-to-trust transfer from a plan, which
qualifies under Code Section 401 or 403(a), other than a Direct Rollover, but
including, without limitation, in connection with a plan merger.
"Valuation Date" means each day on which the New York Stock Exchange is
open for business, or such other date(s) as may be determined by the Named
Fiduciary.
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ARTICLE 2. ESTABLISHMENT
2.1 ESTABLISHMENT OF TRUST.
The Company establishes the Trust, which will consist of amounts
contributed or transferred to the Plan in accordance with its terms, investments
and proceeds thereof and earnings thereon, reduced by all payments from the
Trust. Pursuant to the Plan document, the Company may appoint an administrative
committee (hereinafter referred to as "Administrative Committee") to act on its
behalf. All assets from time to time held under the Plan will be held in the
Trust and will be subject to this Agreement. The Trustee accepts the Trust and
agrees to administer the Trust as provided in this Agreement. However, the
Trustee will have no liability or responsibility for the validity, tax
qualification or legal effect of the Company's Plan.
2.2 PLAN.
While any assets of the Plan are held in the Trust, the Company shall
be responsible for maintaining the Plan so that (i) it is "qualified" within the
meaning of the Code Section 401(a) (and, if Participants will have investment
control over their Accounts under as set forth in Section 6.2 below, the Plan is
duly qualified as an "ERISA Section 404(c) Plan" described in 29 C.F.R.
2550.404(c) under which each Participant is authorized to provide investment
direction for his or her Plan Account to the Company, acting as agent for such
Participant, for conveyance to the Trustee; (ii) if applicable, it permits its
assets to be commingled for investment purposes with the assets of other such
plans by investing such assets in this Trust whether or not its assets will in
fact be held in a separate investment fund; (iii) it does not prohibit the
Company from delegating daily recordkeeping services; and (iv) the Company shall
be responsible for carrying out Participant investment directions pursuant to
Section 6.2.
The Company shall notify the Trustee if the Plan no longer qualifies
under Code Section 401.
ARTICLE 3. DUTIES OF TRUSTEE
3.1 ACCEPTANCE OF CONTRIBUTIONS TO TRUST.
(a) The Trustee will accept such contributions made on behalf of
Participants under the Plan as it receives from time to time from
the Company or a Participating Affiliate. The Trustee will also
accept Rollover Contributions and Direct Rollovers to the Trust
made by Participants in accordance with the Plan. At the
direction of the Named Fiduciary, the Trustee will also accept
Transfer Contributions to the Trust from another qualified plan
or qualified annuity plan covering Participants and will also
accept a transfer of assets and liabilities from a prior trustee
of the Company's plan. All such contributions will either be in
cash, or documents evidencing ownership of a GIC, or, with the
written agreement of ADP and the Trustee, any other assets.
(b) The Trustee will have no responsibility for determining the
proper time or amount of any contribution of the Trust, for
enforcing the collection of any contribution to the Trust or for
determining that contributions satisfy any applicable requirement
of the Plan or law including, without limitation, the minimum
contributions requirements of Code Section 416. The Named
Fiduciary shall be responsible for timely transmission of
contributions to the Trust. Also, the Trustee will have no
responsibility for determining whether the amount of any
contribution (or the portion of such contribution, which is
allocated to the Account(s) of a Participant) meets any
applicable legal requirements or is within any applicable limit
including, without limitation, the limits imposed by Code
Sections 401(k) and (m), 402(g), 404 and 415. The contribution or
transfer of any amount to the Trustee hereunder constitutes a
certification by the Named Fiduciary that such contribution or
transfer is in accordance with the Plan and applicable laws.
3.2 MAINTAIN ACCOUNTS.
The Trustee, or its delegate will maintain accounts or other trust
accounting records, and will make credits to or charges against such accounts,
as necessary for the Trustee to carry out its responsibilities as directed by
the Named Fiduciary or ADP on the Named Fiduciary's behalf, under this
Agreement.
3.3 MAKE PAYMENTS.
Upon receipt of and in accordance with written directions from the
Named Fiduciary, or from ADP acting on behalf of the Named Fiduciary, the
Trustee shall make payments from the Trust, whether as a distribution, direct
rollover, transfer, withdrawal or the disbursement of a loan, and the Trustee
will be fully protected in, and will not incur any liability for, so doing. Such
directions from the Named Fiduciary, or from ADP on the Named Fiduciary's behalf
to the Trustee will include all information necessary to enable the Trustee to
make such payment, and the giving of such directions by the Named Fiduciary, or
ADP to the Trustee constitutes a certification to the Trustee that such payment
is in accordance with the Plan. The Trustee will have no responsibility for any
delay in making payment pending receipt from the Named Fiduciary, or ADP of all
information needed to make the payment (including, if applicable, proper income
tax withholding instructions signed by the recipient), for the application of
any payment by the recipient, for determining the rights or benefits of any
person in the Trust or under the Plan, for calculating or determining any amount
to be distributed to a Participant or Beneficiary (including, without
limitation, any alternate payee as defined in Code Section 414(p)(8)) for
compliance with any applicable requirements for minimum distributions, for the
administration of the Plan, for the adequacy of the Trust to meet all
liabilities arising under the Plan, nor shall the Trustee have responsibility
for ensuring that funds are made available timely in order to effectuate a
subsequent purchase made as a result of a transfer from one Investment Fund
under the Plan to another such Investment Fund.
ARTICLE 4. POWERS OF TRUSTEE
4.1 ADDITIONAL POWERS OF TRUSTEE.
In addition to and not in limitation of such powers as the Trustee has
by law or under any other provisions of the Plan and this Agreement, but subject
to the provisions of this Agreement including, without limitation, Section 5 and
the requirements of applicable law, the Trustee will have the powers specified
in this Section 4.1. As provided herein, the Trustee will exercise such powers
concerning investments or other discretionary actions only as a directed
Trustee, and will not be liable or responsible for the consequences of its
exercising any such power as directed:
(a) to deal with all or any part of the Trust assets including the
power to acquire and dispose of assets;
(b) to hold any part of the Trust assets in cash pending the
investment or distribution thereof, without liability for
interest;
(c) to enforce by suit or otherwise to waive its rights on behalf
of the Trust, and to defend claims asserted against it or the
Trust; provided that the Trustee will not be required to
institute or defend any court or administrative proceeding
unless it has first been indemnified to its satisfaction for
the costs and expenses of such proceeding;
(d) to compromise, adjust and settle any and all claims against or
in favor of it or the Trust;
(e) to vote, or give proxies to vote, any stock or other security
held in the Trust, and to waive notice of meetings; provided,
however, that for plan assets invested in registered
investment companies, the Trustee shall act in accordance with
appropriate directions received from the Company with respect
to the matters to be voted by the shareholders of the
registered investment companies.
(f) to oppose, or consent to and participate in, the
reorganization, merger, consolidation or readjustment of the
finances or capitalization of any enterprise, to pay
assessments and expenses in connection therewith, and to
deposit securities under deposit agreements, to exercise or
sell any conversion privileges or subscription rights, and to
make payments incidental thereto;
(g) to hold securities unregistered, or to register them in its
own name (with or without indication of its fiduciary capacity
hereunder) or in the names of nominees, provided that the
Trustee's records will at all times show that such property is
owned by the Trust;
(h) to hold in its name GICs, if any which it holds pursuant to a
conversion until their maturity date;
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(i) to do all acts and things, not specified herein, which it
deems advisable to carry out the Trust, and generally to
exercise any of the powers of an owner with respect to all or
any part of the Trust;
(j) to make, execute, acknowledge and deliver any and all
documents that it deems necessary or appropriate to carry out
its power and duties hereunder; and
(k) to lend to Participants in the Plan such amounts and upon such
terms and conditions as the Named Fiduciary may direct. Any
such direction shall be deemed to include a certification by
the Named Fiduciary that such lending is in accordance with
the provisions of ERISA and the Plan.
4.2 USE OF AGENTS.
The Trustee may retain an agent or service provider (which may be the
Sponsor, ADP or a division thereof, or an affiliate of ADP or the Trustee) to
perform any of its recordkeeping, custodial or other duties hereunder.
ARTICLE 5. MANAGEMENT OF ASSETS OF FUND
5.1 MANAGEMENT OF FUND ASSETS.
(a) The Company, being a named fiduciary with respect to control
and management of the assets of the Plan, may appoint
Investment Managers to manage (including the power to acquire
and dispose of) the assets of the Plan and may also authorize
investment in certain securities of one or more registered
investment companies, whether open-end or closed-end. Any
Investment Manager so appointed shall be an "investment
manager" as defined by Section 3(38) of ERISA, and must
acknowledge in writing to the Company and to the Trustee that
he is a fiduciary with respect to the Plan. The Trustee until
notified in writing to the contrary shall be fully protected
in relying upon any written notice of the appointment of an
Investment Manager furnished to it by the Company.
(b) The Company or the Investment Manager appointed pursuant to
paragraph (a) above shall have exclusive authority and
discretion to manage and control the assets of the Trust and,
pursuant to such authority and discretion, may direct the
Trustee from time to time and at any time:
(A) To invest and reinvest the Trust, without distinction
between principal and income, in shares of stock
(whether common or preferred) or other evidences of
ownership, bonds, debentures, notes or other
evidences of indebtedness, unsecured or secured by
mortgages on real or personal property wherever
situated (including any part interest in a bond and
mortgage or note and mortgage whether insured or
uninsured), and other property, or part interest in
property, real or personal, foreign or domestic,
whether or not productive of income or consisting of
wasting assets;
(B) To invest and reinvest the Trust in a common,
collective, or group trust administered by a bank
other than the Trustee, the provisions of which trust
shall be deemed a part of this Agreement but only
with respect to any such investment;
(C) To sell, convey, redeem, exchange, grant options for
the purchase or exchange of, or otherwise dispose
of, any real or personal property held in the Trust,
at public or private sale, for cash or upon credit,
with or without security, without obligation on the
part of any person dealing with the Trustee to see to
the application of the proceeds of or to inquire into
the validity, expediency or propriety of any such
disposition;
(D) To manage, operate, repair and improve, and mortgage
or lease for any length of time any real property
held in the Trust; to renew or extend any mortgage,
upon any terms the Investment Manager may deem
expedient; to agree to reduction of the rate of
interest or any other modification in the terms of
any mortgage or of any guarantee pertaining to it; to
enforce any covenant or condition of any mortgage or
guarantee or to waive any default in the performance
thereof; to exercise and enforce any right of
foreclosure; to bid in property on foreclosure; to
take a deed in lieu of foreclosure with or without
paying consideration therefore and in connection
therewith to release the obligation on the bond
secured by the mortgage; and to exercise and enforce
in any action, suit or proceeding at law or in equity
and any rights or remedies in respect of any mortgage
or guarantee;
(E) To exercise, personally or by general or limited
proxy, the right to vote any shares of stock, bonds
or other securities held in the Trust; to delegate
discretionary voting power to trustees of a voting
trust for any period of time; and to exercise,
personally or by power of attorney, any other right
appurtenant to any securities or other property of
the Trust;
(F) To join in or oppose any reorganization,
recapitalization, consolidation, merger or
liquidation, or any plan therefore, or any lease,
mortgage or sale of the property of any organization
the securities of which are held in the Trust; to pay
from the Trust any assessments, charges or
compensation specified in any plan of
reorganization, recapitalization, consolidation,
merger or liquidation; to deposit any property with
any committee or depository; and to retain any
property allotted to the Trust in any reorganization,
recapitalization, consolidation, merger or
liquidation;
(G) To exercise or sell any conversion or subscription or
other rights appurtenant to any stock, security or
other property held in the Trust;
(H) To borrow from any lender (other than the Trustee
in its individual capacity or any other party in
interest with respect to the Plan) money, in any
amount and upon any reasonable terms and conditions,
for purposes of this Agreement, and to pledge or
mortgage any property held in the Trust to secure the
repayment of any such loan; and
(I) To compromise, settle or arbitrate any claim, debt or
obligation of or against the Trust; to enforce or
abstain from enforcing any right, claim, debt or
obligation; and to abandon any property determined by
the Investment Manager to be worthless.
(c) The Trustee shall exercise the powers set forth in paragraph
5.1(b)(i) above only when and to the extent directed in
writing by the Investment Manager or the Company. The
Investment Manager, from time to time and at any time, may
issue orders for the purchase or sale of securities directly
to a broker or dealer, and for such purpose, the Trustee will
upon request execute and deliver to the Investment Manager one
or more trading authorizations. Written notification of the
issuance of each such order shall be given promptly to the
Trustee by the Investment Manager, and the execution of each
such order shall be confirmed by the broker to the Investment
Manager and to the Trustee. Such notification shall be
authority to the Trustee to receive securities purchased
against payment therefore and to deliver securities sold
against receipt of the proceeds therefore, as the case may be.
(d) Unless the Trustee knowingly participates in, or knowingly
undertakes to conceal, an act or omission of another
fiduciary, knowing such act or omission to be a breach of the
duty of care owed by such other fiduciary with respect to the
Plan, the Trustee shall not be liable for any act or omission
of such other fiduciary and shall not be under any obligation
to invest or otherwise manage the assets of the plan that are
subject to the management of such other fiduciary. Without
limiting the generality of the foregoing, the Trustee shall
not be liable by reason of its taking or refraining from
taking at the direction of an Investment Manager any action
pursuant to this Article, or pursuant to a notification of an
order to purchase or sell securities issued by an Investment
Manager, nor shall the Trustee be liable by reason of its
refraining from taking any action because of the failure of an
Investment Manager to give such direction or order; the
Trustee shall be under no duty to question or to make
inquiries as to any direction or order or failure to give
direction or order by an Investment Manager; and the Trustee
shall be under no duty to make any review of investments
acquired for the Trust at the direction or order of an
Investment Manager and shall be under no duty at any time to
make any recommendation with respect to disposing of or
continuing to retain any such investment.
(e) Without limiting the generality of the provisions of Section
8.3 hereof, the Company agrees, to the extent permitted by
law, to indemnify the Trustee and hold it harmless from and
against any claim or liability that may be asserted against
it, otherwise than on account of the Trustee's own negligence
or willful misconduct, by reason of the Trustee's taking or
refraining from taking any action when acting in good faith in
accordance with this
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Article, including, without limiting the generality of the
foregoing, any claim or liability that may be asserted against
the Trustee on account of failure to receive securities
purchased, or failure to deliver securities sold, pursuant to
orders issued by the Investment Manager directly to a broker
or dealer or for any loss, expense or claim asserted against
the Trustee as a result of following Participant directions or
directions of the Named Fiduciary.
ARTICLE 6. INVESTMENT FUNDS
6.1 INVESTMENTS.
(a) By establishing and maintaining this Trust, the Company has
selected the Investment Funds, which have been made available
as the investment vehicles to be available for the investment
of the assets held in the Trust. Investment Funds may include
an Employer Stock Fund ("ESF") and a common, collective or
group trust funds (a "group trust") maintained by the Trustee
for investment by qualified plans and registered investment
companies. If and only if a group trust is designated as an
Investment Fund, the Trustee may combine in the group trust
assets of the Trust with assets of other pension or
profit-sharing or other plans or trusts qualified under Code
Section 401(a) and exempt from tax under Code Section 501(a),
or with assets of individual retirement accounts exempt from
tax under Code Section 408(e) or governmental units described
in Code Section 818(a)(6), and permitted by existing or future
rulings of the United States Treasury Department to pool their
respective funds in a group trust. The provisions of the group
trust shall be deemed a part of this Agreement with respect to
any such investment.
(b) If the Company determines that Participants will have control
over the investment of their Accounts under Section 6.2 below
the Company, through ADP, will direct the Trustee to invest
the assets of the Plan as directed by the Participants in
accordance with the relevant provisions of the Plan document
(and related adoption agreement, in the case of a prototype
retirement plan), and this Agreement (including particularly
Section 6.2 hereof). Such investments by the Trustee shall
include assets, if any, under the control of an Investment
Manager (including without limitation the Trustee) and assets
invested in registered investment companies, whether open-end
or closed-end, but shall exclude all guaranteed investment
contracts ("GICs"), if any, which are held pursuant to a
conversion. In investing the assets of a Participant's
Account(s), including those assets for which the Trustee has
no investment responsibility, the Trustee will follow the
investment directions of the Participant as such directions
are communicated to the Trustee by ADP. The Company hereby
certifies that the Plan shall at all times be maintained in
compliance with the investment selection provisions of Section
404(c) of ERISA.
(c) If, and to the extent authorized by the Plan, the Trustee
shall, if so directed by the Company, segregate all or a
portion of the assets of the Plan that are held in Trust by it
into one or more separate investment accounts to be known as
"Participant Directed Brokerage Accounts." Whenever a
Participant is directing the investment and reinvestment of a
Participant Directed Brokerage Account, the Participant shall
have the powers and duties which an investment Manager would
have under this Trust Agreement if an Investment Manager were
then serving and the Trustee shall be protected to the same
extent as it would be protected under this Trust Agreement as
to directions or the absence of directions of an Investment
Manager. Participants shall be entitled to give orders
directly to the broker for the purchases and sale of
securities which shall include as follows, even though the
same may not be legal investment for trustees under any law
other than ERISA: Preferred and common stocks or listed
securities on the New York or American stock exchanges; all
NASDQ listed stocks; corporate and government bonds; treasury
and government issues; and, selected registered mutual funds
as determined by the brokerage provider. The broker shall
provide confirmation of each order to ADP which shall maintain
records in such form as to satisfy reporting requirements of
the Company and as required under ERISA and the Code.
6.2 PARTICIPANT INVESTMENT CONTROL
The following shall apply if the Company determines that Participants
will have control over the investment of their Accounts under the Plan:
(a) Except with respect to a limited period of time in connection
with a conversion, each Participant will have investment
control over his Account(s). Subject to the administrative
rules and procedures of ADP and the Trustee, of any registered
investment vehicle, and any other investment vehicle under
this Trust, each Participant will specify the Investment Fund
or Investment Funds available under the Company's Plan in
which contributions to the Plan on his behalf will be
invested. The Company may permit each Participant to transmit
his investment instructions by telephonic instructions
directly to ADP to be given to the Trustee pursuant to Section
6.3(b). Similarly, subject to the administrative rules of the
Trustee or ADP, of any investment vehicle from time to time in
effect, whether or not an Investment Fund, any registered
investment company and ERISA Section 404(c), a Participant may
transfer any amount in his Account(s) from one Investment Fund
to another Investment Fund available under the Company's Plan.
To the extent a Participant has directed that his or her
account shall be invested in a registered investment company,
the Trustee shall have no investment responsibilities with
respect thereto without regard to whether the Plan satisfies
the provisions of ERISA Section 404(c).
(b) A Participant will exercise his investment control under the
preceding paragraph by delivering written or electronic
instructions (including, without limitation through voice
response systems) to ADP. ADP will consolidate Participants'
investment instructions and will send such instructions to the
Trustee. The Trustee will invest future contributions on
behalf of a Participant in accordance with such instructions,
or the Trustee will transfer amounts from one Investment Fund
to another in accordance with such instructions. Any such
transfer will be affected in accordance with the Trustee's
administrative procedures.
(c) Subject to the first sentence of Section 6.2(a), each
Participant will have full responsibility for the investment
results of his investment instructions under the preceding two
paragraphs.
6.3 UNCLEAR OR MISSING INSTRUCTIONS; TRANSMISSION OF INSTRUCTIONS.
(a) If investment instructions accompanying contributions or
otherwise regarding investments for a Participant's Account(s)
are not received or are unclear in the opinion of the Trustee
or its agent, the Trustee may hold any part of the assets
affected by such missing or unclear instructions in cash, or
may return contributions, in either case without liability for
interest, rising or falling securities prices, or other
income, pending receipt of clear and complete instructions.
The Trustee or its agent will, in the case of missing or, seek
prompt clarification of unclear instructions or prompt
furnishing of missing instructions. unclear instructions
(b) By executing this Trust Agreement, the Company has entered
into a Portfolio Agreement with the Trustee, which gives the
Trustee exclusive management and investment authority with
respect to the Portfolio.
6.4 EMPLOYER STOCK FUND
Subject to the Trustee's consent, an Employer Stock Fund may be
established as an Investment Fund hereunder. If applicable, the duties and
obligations of the Trustee, Company and any other party with regard to the
Company Stock Fund shall be set forth and governed by a duly executed Manager
Agreement, which shall be incorporated herein by this reference.
ARTICLE 7. - CONVERTED ANNUITY CONTRACTS
7.1 CONVERTED ANNUITY CONTRACTS.
(a) The provisions of this Article 7 are only applicable to a
conversion that involves one or more GICs and is intended to
serve as a Portfolio Agreement for the purpose of allowing the
Trustee to establish for the Company an individual portfolio
("Portfolio") as a separate Investment Fund. The Portfolio
shall consist of any GICs received by the Trustee as
conversion assets that are specifically designated by the
Company to be included within the Portfolio.
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(b) By executing this Trust Agreement, the Company has entered into a
Portfolio Agreement with the Trustee, which gives the Trustee
exclusive management and investment authority with respect to the
Portfolio.
(c) Upon the conversion by the Company of Plan assets, which include
outstanding GICs, the Trustee shall have the rights, powers and
privileges of an absolute owner in the management and
administration of any converted GIC. The Trustee as investment
manager of such GIC has the ability to hold, manage and
administer all property that may be invested in the Portfolio and
to exercise any and all of the rights that belong to the absolute
owner of any GIC, that are granted by the terms of any GIC or by
the terms of this Agreement. The Trustee shall hold in the
Portfolio the proceeds of any dividends and other payments of any
kind (other than those received from the surrender or maturity of
a GIC) received with respect to any GIC. The only beneficial
owner of such Portfolio shall be the Trust.
(d) Upon complete surrender or maturity of any GIC held within the
Company's conversion GIC portfolio, all proceeds from such GIC
will be transferred as soon as practicable to the stable value
fund or money market fund that is then maintained as an
Investment Fund for the Plan.
(e) The Trustee shall pay from the Company's portfolio, any premiums,
assessments, dues, charges and interest, if any, upon any GIC
held in the Portfolio. Reasonable expenses incurred by the
Trustee in the performance of its duties hereunder, and all other
proper charges and disbursements of the Portfolio (including any
taxes) shall be reimbursed through a combination of charges to
the Portfolio and direct billing to the Company, as determined
from time to time by ADP and the Trustee.
(f) No insurance company that may issue any GIC held in such
Portfolio shall be deemed to be a party to this Agreement for any
purpose, or to be responsible in any way for the validity of this
Agreement, or to have any liability under this Agreement other
than as stated in each GIC that it may issue. Any insurance
company may deal with the Trustee, as sole owner of any GIC held
in the Portfolio, without inquiry as to the authority of the
Trustee to act, and may accept and rely upon any written notice,
instruction, direction, certificate or other communication from
the Trustee believed by it to be genuine and to be signed by an
office of the Trustee and shall incur no liability or
responsibility for so doing. Any sums paid out by any insurance
company under any of the terms of a GIC issued by it and held in
the Portfolio either to the Trustee, or, in accordance with the
Trustee's direction, to any person or persons designated as
payees in such sums, and the insurance company shall have no
obligation to look to the disposition of any sums so paid. No
insurance company shall be required to look into the terms of
this Agreement, or to question any action of the Trustee or to
see that any action of the Trustee is authorized by the terms of
this Agreement.
(g) Notwithstanding anything contained herein to the contrary, non of
the Company, nor ADP nor the Trustee shall be liable for the
refusal of any insurance company to issue or change any GIC or to
take any other action requested by the Trustee, nor for the form,
genuineness, validity, sufficiency, or effect of any GIC held in
the stable value Investment Fund, nor for the act of any person
or persons that may render any such GIC null and void, nor for
the failure of any insurance company to pay the proceeds and
avails of any such GIC as and when the same shall become due and
payable, nor for any delay in payment resulting from any
provision contained in any such GIC nor for the fact that for any
reason whatsoever (other than their own negligence or willful
misconduct) any GIC shall lapse or otherwise become
uncollectible.
(h) The Company, Sponsor and ADP (or affiliate of ADP) acknowledge
that the Trustee is not the original purchaser of any GIC account
accepted by the Trustee. The Trustee is not a fiduciary for the
purpose of the acquisition of any such GIC. The Company shall
indemnify and hold the Trustee harmless from any and all
liability, claims, damages, costs or expenses (including
reasonable attorney's fees) arising from or claimed to have
arisen from the original purchase of any GIC by a prior Trustee
or any action taken with respect to such GIC prior to the
Company's conversion of the Plan.
(i) The Company warrants that the person signing this Trust is an
authorized fiduciary for the purpose of entering into such
Portfolio Agreement.
ARTICLE 8. -- PROTECTIONS OF TRUSTEE
8.1 RELIANCE BY TRUSTEE OR ITS AGENT.
(a) The Trustee through ADP may rely upon any decision of the
Company, Plan Administrator or Administrative Committee
purporting to be made under the Plan, and upon any information,
statements, certifications, instructions or directions submitted
by the Company, Plan Administrator or the Administrative
Committee (including statements concerning the entitlement of any
Participant to benefits under the Plan or directions to make
payments). The Trustee will not be bound to inquire as to the
basis of any such decision, information, statements,
certifications, instructions or directions, and will incur no
obligation or liability for any action taken or omitted in good
faith by the Trustee in reliance thereon.
(b) Whenever the Trustee is permitted or required to act upon the
instructions or directions of the Company, Plan Administrator,
the Administrative Committee or a Participant, the Trustee will
be fully protected in, and will not incur any liability for, not
acting in the absence thereof.
(c) The Company will certify to the Trustee or its agent the names of
the members of the Administrative Committee (and of any person
authorized to act on behalf of the Company or the Administrative
Committee for purposes of the Plan) and will provide the Trustee
or its agent with specimen signatures of any such person or
persons. The Trustee or its agent may assume the authority of
such person or persons continues in effect until the Trustee or
its agent receives written advice from the Company or the
Administrative Committee to the contrary.
(d) The Trustee may consult with legal counsel (who may be counsel to
the Trustee or to the Company ) concerning any questions which
may arise with respect to its rights and duties hereunder, and
the opinion of such counsel will be full and complete protection
in respect of, and the Trustee will not incur any liability for,
any action taken or omitted hereunder in good faith by the
Trustee in accordance with the opinion of such counsel.
8.2 ABSENCE OF INSTRUCTIONS.
If the Trustee receives no instructions from the Company, Plan
Administrator or Administrative Committee in response to communications sent to
the Administrative Committee or the Company at the last known address of either
as shown in the records of the Trustee, the Trustee may make such determination
with respect to distributions and other administrative matters arising under
the Plan as it considers reasonable and in accordance with the provisions of
the Plan. Any determinations so made will be binding on all persons having any
interest under the Plan or Trust, and the Trustee will incur no obligation or
responsibility for any such determination made or for any action taken by the
Trustee in good faith in such circumstances.
8.3 INDEMNIFICATION OF TRUSTEE.
The Company and its successors, assigns or legal representatives, will
fully indemnify and save harmless the Trustee and its employees, agents,
successors and assigns, from any loss (including reasonable attorneys' fees),
liability, claim or responsibility arising (a) out of any matter as to which
this Agreement provides that the Trustee is directed, protected, not liable, or
not responsible (including, without limitation, the reporting of the Trustee of
GICs in connection with a conversion in accordance with the provisions of AICPA
SOP 94-4, in the circumstance in which the original issuer of the GIC refuses to
provide full benefit responsiveness in accordance with the Plan), unless such
loss or liability arises out of the Trustee's negligence, bad faith, or willful
or gross misconduct or (b) by reason of any breach of any statutory or other
duty owed to the Plans by the Company, any Employer, the Plan Administrator, the
Administrative Committee, any Investment Manager or any delegate of any of them
(and for purposes of this sentence the Trustee shall not be considered to be
such a delegate), whether or not the Trustee may also be considered liable for
that other person's breach under the provisions of Section 405(a) of ERISA.
8.4 ALLOCATION OF RESPONSIBILITY.
The Trustee shall be responsible only for those functions, which have been
assigned to it under this Agreement. Notwithstanding any provision elsewhere
herein to the contrary, (a) if and to the extent that any non-discretionary
administrative functions are allocated to the Sponsor or ADP (or an affiliate
of ADP) pursuant to a written agreement to which the Company is a party then,
except to the extent otherwise provided in such agreement, the Trustee shall
have no
Page 5 of 8
responsibility for the performance of such functions and shall incur no
liability or obligations with respect thereto, (b) the Trustee shall be
entitled to rely upon information or instructions provided to it by the Sponsor
or ADP (or an affiliate of ADP) to the same extent as if such information or
instructions had been provided by the Company, Plan Administrator, the
Administrative Committee or the Participant, and (c) the Trustee shall have no
responsibility for information which may be in the possession of the Sponsor or
ADP (or any affiliate of ADP) until such information has been received by the
Trustee.
ARTICLE 9.-FEES AND EXPENSES
9.1 FEES AND EXPENSES.
(a) The Trustee's fees for performing its duties hereunder will
be such amounts as it establishes from time to time in its fee
schedule (provided that the Trustee may provide for different
fees in a written fee agreement with the Company). The Trustee
may change its fee schedule (or fee agreement) upon 60 days'
advance written notice to the Company. Such fees will be
payable for each calendar month and will not be prorated for
periods of less than one calendar month.
(b) The Trustee may charge a reasonable fee in addition to its
normal fees if it assumes any additional obligations under the
Plan, or if it provides any service, including fiduciary
services, not contemplated in the fee schedule and which the
Trustee deems to be necessary or desirable or which the
Administrative Committee or the Company requests.
(c) The Plan Administrator or the Company may authorize, subject
to the administrative rules and procedures of ADP and the
Trustee that all or any portion of the Company's or Plan
Administrator's other fees and expenses of administering the
Plan (including without limitation, ADP's annual maintenance
fee) be paid from Trust assets, and the Trustee will pay such
fees and expenses as soon as practicable (but no later than
ten (10) days) after receiving notice from ADP on behalf of
the Company or Plan Administrator. The Company hereby
authorizes and directs that any and all fees due to ADP under
its Administrative Services Agreement with the Company be
paid, at ADP's request, from Trust assets if such fees are not
paid by the Company within 30 days of the date they are due to
be paid to ADP. In connection therewith, the Trustee is hereby
authorized to liquidate assets in the Trust in order to
provide for payment of such charges to ADP. The Trustee shall
be fully protected in, and shall not incur any liability for,
any payment to ADP pursuant to the preceding sentences.
(d) The Trustee's fee, any taxes of any kind, which may be levied
or assessed upon or in respect of the Trust, and any and all
expenses reasonably incurred by the Trustee, will, unless paid
by the Company at its option, be paid from the Trust. In order
to provide for payment of any such fee, taxes or expense, or
the payment of any other fee or expense of administering the
Plan authorized by the Company or Plan Administrator, the
Trustee in its discretion may partially or fully liquidate any
asset in the Trust without liability for any loss occasioned
thereby; in any such case, the Trustee will to the extent
reasonably practicable allocate expenses (and consequent
liquidation of assets) to the account(s) that gave rise to the
fee, tax or expense. Any expenses of the Trustee, which are
not paid from the Trust for whatever reason, will be the
responsibility of the Company.
9.2 ERISA BOND.
The Trustee, and any other person who handles Plan assets, will be
bonded but only to the extent (if at all) required under ERISA, and no other
bond or security will be required for the faithful performance of their duties
hereunder. It will be the Named Fiduciary's responsibility to secure such bond
on its behalf if it is required to obtain a bond under ERISA.
9.3 TAXES.
The Trustee shall pay out of the Trust all real and personal property
taxes, income taxes and other taxes of any and all kinds whatsoever that may be
levied or assessed under existing or future laws against the Trust. Until
advised to the contrary by ADP or the Company, the Trustee shall assume that
the Trust is exempt from Federal, State and local income taxes, and shall act
in accordance with that assumption. ADP or the Named Fiduciary shall timely
file all Federal, State and local tax and information returns relating to the
Plan and Trust. Notwithstanding the foregoing, the Trustee shall timely file
all Federal, State and local information returns relating to distributions from
the Trust. Such tax-related payments from the Trust shall be withdrawn by the
Trustee out of the Trust unless paid by ADP or the Company, but such payments
shall be paid by ADP or the Company if the same cannot by operation of law be
withdrawn from the Trust. All payments from the Trust under this Section 8.3
may be made without approval or direction.
ARTICLE 10.-ACCOUNTS AND REPORTS
10.1 ACCOUNTS AND REPORTS.
(a) The Trustee, through its agents, will keep full accounts of
all its receipts, disbursements and other transactions
hereunder, and will determine the fair market value of the
assets of the Trust as of each Valuation Date provided for
under the Plan (and as of the last business day of the Plan
Year if not otherwise a Valuation Date). The fiscal year of
the Trust will coincide with the Plan Year. Within a
reasonable time after the end of the Plan Year, or within a
reasonable time after its removal or resignation or the
termination of the Trust, the Trustee, through its agents,
will render to the Company a consolidated account of all
transactions and other actions taken in connection with its
administration of the Trust since the previous such
accounting. The Trustee shall account separately for its
collective investment funds; any registered investment
companies; and, with respect to a conversion, any GICs.
(b) No person other than the Company will have the right to
demand or receive any report or account from the Trustee. The
written approval of any account by the Company will be final
and binding upon the Company, the Participants and all persons
who then are or thereafter become interested in the Trust as
to all matters and transactions stated or shown therein. The
failure of the Company to notify the Trustee within 60 days
after the Trustee's sending of any account of its objections
(if any) to the account will be the equivalent of written
approval. If the Company files any objections within such 60
day period with respect to any matters or transactions stated
or shown in the account and the Company and the Trustee cannot
resolve such objections, the Trustee will have the right to
have such objections settled by judicial proceedings. Nothing
herein will deprive the Trustee of the right to have a
judicial settlement of its accounts. In any proceeding for a
judicial settlement of any account or for instructions, the
only necessary parties will be the Trustee and the Company. In
order to save the Trust from the expense that might otherwise
be incurred, it is a condition to the acquisition of any
interest in the Trust that no person other than the Company
may institute or maintain any action or proceeding against the
Trustee (i) without first requesting the Company to resolve
the question with the Trustee and (ii) until after the Company
has had a reasonable opportunity to resolve such question or
has declined to pursue such question with the Trustee.
ARTICLE 11.-RESIGNATION OR REMOVAL OF TRUSTEE; TRANSFERS TO OTHER TRUST
11.1 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may resign at any time by giving 60 days' written
notice to the Company, ADP and the Sponsor. The Company may
remove the Trustee at any time by giving 60 days' written
notice to the Trustee, ADP, and if the plan is a Prototype
Plan, the Sponsor. In either case, the notice period may be
reduced to such shorter period as the Trustee, ADP, the
Sponsor and the Company agree upon. The Trustee's removal or
resignation will be effective upon the appointment of a
successor trustee.
(b) When the Trustee's resignation or removal becomes effective,
the Trustee will perform all acts necessary to transfer the
assets of the Trust and copies of the records of the Trust
(and any other records being maintained by the Trustee) to its
successor. However, the Trustee may reserve such portion to
the Trust assets as it may reasonably determine to be
necessary for payment of its fees and any taxes and expenses
(including
Page 6 of 8
any fees and expenses of any person or entity authorized by the
Company or Plan Administrator to be paid from Trust assets); any
balance of such reserve remaining after payment of such fees, taxes
and expenses will be paid over to its successor.
(c) The resignation or removal of the trustee will not terminate the
Trust. In the event of any vacancy in the position of Trustee, whether
by the resignation or removal of the Trustee, the Company will appoint
a successor trustee. Should the Company fail to appoint a successor
trustee within a reasonable period of time, Trustee shall have the
right to seek a court-appointed successor trustee. Each successor
trustee so appointed and accepting the office of Trustee hereunder
will have all of the rights and powers and all of the duties and
obligations of the original Trustee under this Agreement. The removal
of the Trustee and the appointment of a new trustee shall be by a
written instrument delivered to the Trustee.
(d) If the Plan is a Prototype Plan, in the event that either (i) the
Company removes the incumbent Trustee without ADP's and the Sponsor's
written consent, or (ii) following the resignation or removal of the
incumbent Trustee appoints any successor Trustee without ADP's and
the Sponsor's written consent, or (ii) following the resignation or
removal of the incumbent Trustee appoints any successor Trustee
without ADP's and the Sponsor's written consent, the Company may no
longer participate in the Prototype Plan program maintained by ADP or
the Sponsor.
(e) No Trustee will be liable or responsible for anything done or
omitted in the administration of the Trust before it became Trustee or
after it ceases to be Trustee.
11.2 TRANSFERS TO OTHER TRUSTS.
(a) The Company may direct that all or a portion of the assets of the
Trust established hereunder be transferred from the Trustee to the
trustee of another trust established under the Plan at any time by
giving 60 days' written notice to the Trustee, ADP, and, if the Plan
is a Prototype Plan, the Sponsor. The notice period may be reduced to
such shorter period as the Trustee, ADP, the Sponsor (if applicable)
and the Company agree upon. The transfer will be effective upon the
last day of the notice period or, if later, the acceptance of the
assets being transferred by such other trustee. Until the effective
date of the transfer of any such assets, the Trustee will continue to
have full authority and responsibility to act as Trustee hereunder
with respect to such assets.
(b) When the transfer becomes effective, the Trustee will perform all acts
necessary to transfer the assets to be transferred from the Trust and
copies of the records of the Trust (and any other records being
maintained by the Trustee) to the other trustee.
(c) If the Plan is a Prototype Plan, in the event the Company directs
that any assets of the Trust be transferred to the trustee of any
other trust without ADP's and the Sponsor's written consent, the
Company may no longer participate in the prototype Plan and Trust.
(d) The Trustee will not be liable or responsible for any assets, which
have been transferred to any other trust pursuant to this Section 10.2
or for any actions or omissions taken with respect to such assets
after such transfer.
ARTICLE 12. -- AMENDMENT AND TERMINATION
12.1 AMENDMENT OR TERMINATION.
The Trustee may at any time and from time to time amend any or all
provisions of this Agreement. A copy of any such amendment will be delivered to
ADP, the Sponsor (in the case of a Prototype Plan) and the Company at least 60
days before the effective date of such amendment (or such shorter notice period
as ADP, the Trustee, the Sponsor (in the case of a Prototype Plan) and the
Company agree to), provided that, to the extent necessary to retain the Plan's
tax qualification, any amendment may take effect retroactively. The Company
will have the right to terminate this Trust and will deliver a notice of
termination specifying the effective date thereof to the Trustee. No amendment
or termination will cause this Agreement to be inconsistent with the provisions
of the Plan or ERISA.
12.2 EFFECT OF TERMINATION.
In the event of termination of this Agreement, the Trustee will continue
to hold the Trust assets for application and disbursement in accordance with
the applicable terms of the Plan. The Trust created hereunder will terminate
upon the distribution of all the assets of the Trust.
ARTICLE 13. -- MISCELLANEOUS PROVISIONS
13.1 RELATIONSHIP TO PLAN DOCUMENT.
Certain provisions affecting the Trustee appear in the separate Plan
document and are not repeated in this Agreement. Unless the context clearly
indicates otherwise, any term defined in the Plan document will have the same
meaning when used in this Agreement. If and to the extent that any provisions
of this Agreement are inconsistent with any provision of the Plan document
affecting the rights or benefits of Participants, the Plan document will
control.
13.2 EXCLUSIVE BENEFIT.
In directing the Trustee hereunder, the Company, Plan Administrator and
the Administrative Committee will follow the provisions of the Plan and will
not give any direction at any time, either during the existence or upon the
discontinuance of the Plan, that would cause any assets of the Trust to be used
for or diverted to purposes other than the exclusive benefit of Participants or
their Beneficiaries in accordance with the Plan; provided that assets may be
used to pay fees and expenses incurred in the administration of the Plan and
the Trust or may be returned to the Company as specifically provided in the
Plan.
13.3 MERGER OR CONSOLIDATION.
Any corporation into which the Trustee merges or with which it is
consolidated or any corporation resulting from any merger or consolidation, to
which the Trustee is a party, will be the Trustee hereunder without execution
or filing of any additional instrument or the performance of any further act.
13.4 INQUIRIES NOT REQUIRED.
No person dealing with the Trustee will be bound to see to the application
of any money or property paid or delivered to the Trustee or inquire into the
authority of the Trustee to enter into any transactions hereunder.
13.5 GOVERNING LAW.
To the extent that state law applies, the provisions of the Trust will be
construed, enforced and administered according to the laws of the Commonwealth
of Massachusetts without regard to its conflict of law provisions.
13.6 WARRANTY OF AUTHORIZATION.
The Company warrants that the person signing this Trust Agreement has the
authority to execute such document on behalf of the Company.
13.7 THE SPONSOR AND ADP.
The Company and the Trustee acknowledged that neither Sponsor nor ADP (nor
any affiliate of ADP) has (a) any discretionary authority or discretionary
control respecting management of the Plan or management or disposition of Plan
assets, (b) authority or responsibility to render investment advice for a fee
or other compensation, direct or indirect, with respect to any moneys or other
property of the Plan, or (c) discretionary authority or discretionary
responsibility in the administration of the Plan.
13.8 NON-ALIENATION OF BENEFITS.
No benefit to which a Participant or his beneficiary is or may become
entitled under a Plan shall at any time be subject in any manner to alienation
or encumbrance, nor be resorted to, appropriated or seized in any proceeding at
law, in equity or otherwise. No Participant or other person entitled to receive
a
Page 7 of 8
benefit under the Plan shall, except as specifically provided in the Plan or as
otherwise required by law, have power in any manner to transfer, assign,
alienate or in any way encumber such benefit under the Plan, or any part
thereof, and any attempt to do so shall be void.
13.9 DUTY TO FURNISH INFORMATION.
Both the Company and the Trustee shall furnish to the other any documents,
reports, returns, statements, or other information that the other reasonably
deems necessary to perform its duties imposed under the plan or this Trust
Agreement or otherwise imposed by law.
13.10 WITHHOLDING.
The Trustee, on behalf of the Plan, shall withhold any tax, which by any
present or future law is required to be withheld from any payment under the
Plan. The Named Fiduciary and ADP shall provide all information reasonably
requested by the Trustee to enable the Trustee to so withhold.
13.11 UNCLAIMED BENEFIT PAYMENTS.
If any check or share certificate in payment of a benefit hereunder which
has been mailed by regular US mail to the last address of the payee furnished
the Trustee by the Named Fiduciary or ADP is returned unclaimed, the Trustee
shall notify the Named Fiduciary or ADP and shall discontinue further payments
to such payee until it receives the further instruction of the Named Fiduciary
or ADP.
13.12 NO LIABILITY FOR ACTS OF PREDECESSOR AND SUCCESSOR TRUSTEES.
The Trustee shall have no liability for the acts or omissions of any
predecessors or successors in office.
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TRUSTEE COMPANY
Approved By: /s/ Xxxxxxxxx X. Xxxxx Approved By: /s/ Xxxx Xxxxxxxx
---------------------- ------------------
Name: XXXXXXXXX X. XXXXX Name: XXXX XXXXXXXX
---------------------- ------------------
Title: VICE PRESIDENT Title: EVP
---------------------- ------------------
APPROVAL MUST BE BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY
-------------------------------------------------------------------------------
MANAGER AGREEMENT
THIS AGREEMENT is made by and between Tandy Brands Accessories, Inc.
(hereinafter the "Client") and State Street Bank and Trust Company (hereinafter
"State Street") effective as of October 1, 2001.
WHEREAS, Client has established and continues to maintain the Tandy Brands
Accessories, Inc. Employees Investment Plan (hereinafter the "Plan") for the
purpose of providing retirement and other benefits to certain of its employees;
WHEREAS, Client has created a trust, as a funding vehicle of the Plan,
(hereinafter the "Trust");
WHEREAS, the Client has the authority to appoint investment managers for the
Plan; and
WHEREAS, the Client desires that State Street serve as investment manager with
respect to certain functions related to the Plan's investment in qualifying
employer securities;
NOW, THEREFORE, in consideration of the mutual agreements herein contained, it
is covenanted and agreed as follows:
1. APPOINTMENT OF MANAGER: The Client hereby appoints State Street as the
Manager ("Manager") for those Trust assets held under the TANDY BRANDS
ACCESSORIES, INC. Stock Fund (hereby collectively referred to as the "Account").
The duties with respect to the Account which are being delegated to State Street
as Manager are listed on attached Schedule 1 (the "Delegated Duties"). State
Street shall only have responsibility for those duties which are specifically
identified as Delegated Duties. The Client warrants that it has authority to
enter into this agreement.
2. DISCRETIONARY AUTHORITY: (A) Subject and limited to the guidelines described
in Section 3 (the "Guidelines") and to the Delegated Duties on attached Schedule
0, Xxxxx Xxxxxx shall have authority to manage the assets in the Account
including, without implied limitation, authority to purchase, sell, exchange,
convert, trade, and generally to deal in assets of the Account. Without limiting
the generality of the foregoing, State Street is specifically authorized to
invest all or any part of the Account in collective investment funds maintained
for the investment of the assets of employee benefit plans qualified within the
meaning of and exempt from tax under the Internal Revenue Code or other
applicable federal laws or statutes, and to hold any part of the Account in
savings or other deposit accounts maintained by State Street, in other similar
short-term investments or in cash on a temporary basis pending investment for
the purpose of complying with the Guidelines and the Delegated Duties.
(B) State Street shall have full authority, in each case without responsibility
for delays or
1
errors in transmission of orders or data due to a breakdown or failure of
transmission or communication facilities and without liability for the acts or
omissions of third parties, (1) to use computer programming services to assist
in achieving the Client's objectives, (2) to trade through such commission
merchants and brokers as State Street shall select, including any affiliate for
its usual commission (provided that the conditions of Prohibited Transaction
Class Exemption 86-128 are met) and (3) to use any nominees, central
depositories and banks to deal with the assets of the Account, including margin.
(C) In accordance with the Delegated Duties, the Guidelines and the provisions
of the Plan, State Street is specifically authorized to buy or sell shares of
common stock of the Client (the "Stock") on a national securities exchange or
elsewhere as it may elect. In accordance with the provisions of the Plan, State
Street may also purchase newly issued Stock or Stock held in the treasury of
the Client. State Street may, for the purpose of reducing brokerage fees,
commissions, and other expenses, defer the purchase of Stock until it shall have
accumulated sufficient funds to purchase quantities which would effect such
reductions. State Street may limit the daily volume of its transactions in Stock
to the extent that such action is deemed by it to be in the best interest of
Plan participants and their beneficiaries.
(D) State Street is hereby authorized to vote upon any stock or other securities
of any corporation at any time held in the Account or otherwise consent to or
request any action on the part of such corporation, and to participate in
reorganizations, recapitalizations, consolidations, mergers and similar
transactions with respect to such stocks or other securities; and generally to
exercise any of the powers of an owner with respect to stocks or other
securities comprising the Account which State Street deems to be for the best
interests of the Plan to exercise. Notwithstanding the foregoing, if the Plan
provides voting and/or other rights with respect to qualifying employer
securities held in the Account, Client shall cause to be sent in a timely
manner to each participant whose individual account is invested in the Account
copies of all proxy and tender offer solicitation material which may relate to
the Stock, together with a form advising the participant of his or her rights
and responsibilities with respect to the voting or tendering of the Stock and
requesting confidential voting or tender instructions. The Client shall
establish or cause to be established such procedures for the collection of
instructions on the voting of such Stock and the timely transmission of such
instructions to State Street as it shall determine to be appropriate. To
facilitate the foregoing right of the participants and their beneficiaries, the
Client shall use its best efforts to distribute or causes to be distributed to
each participant substantially the same information as may be distributed to the
stockholders of the Client in connection with such offer and the Client shall
establish procedures for the confidential collection of participants' and their
beneficiaries' instructions with respect to such Stock. Shares of Stock for
which valid voting instructions are received shall be voted in accordance with
the participants' instructions. For shares of Stock which are not yet allocable
to any participant's account or shares of Stock for which no valid voting
instructions have been received, the Stock will be voted in a manner equal to
the proportion that the number of shares of Stock for which instructions
2
have been received. In the case of a tender or exchange offer by any person or
entity (including the Client), shares of Stock for which a valid tender
instruction are received shall be tendered. Shares of Stock for which no tender
instructions have been received will not be tendered. Shares of Stock which are
not yet allocable to any participant shall be tendered or exchanged in the same
proportion as the Stock which is allocable to the participant's accounts is
being tendered or exchanged. The Client represents that the provisions of this
paragraph D are consistent with the terms of the Plan.
(B) State Street, in its discretion or as directed by the Client, may limit the
daily volume of its purchases or sales of securities, and as a result, may limit
the Plan's transactions in any or all of the Plan's investment funds. State
Street may not complete Plan transactions on a particular day for a number of
reasons, including but not limited to, suspension of trading in an asset
important to one of the investment funds, insufficient liquidity within any
investment fund to process transactions, or a major market disruption. As a
result, there may be a delay in accepting and/or execution of participant's
transactions for one or more days.
3. GUIDELINES: The Client shall from time to time furnish State Street with the
Guidelines for liquidity management of the Account, in which event State Street
shall make its decisions consistent within such Guidelines. Changes in the
Guidelines shall make due allowance for the time which State Street shall have
to come into compliance with the changes to such Guidelines.
4. FEES: For services under this Agreement, State Street shall be entitled to
receive a fee as described in attached Schedule 2. Such fee, unless paid
directly by the Client, shall be charged against the Account. The Client shall
pay reasonable out-of-pockets expenses of State Street related to shareholder
communications and proxy solicitation and tabulation.
5. LIMITS ON DUTIES: State Street shall be responsible only for fulfilling its
Delegated Duties and for managing the Account in good faith in accordance with
the Guidelines, and shall have no responsibility whatsoever for, and shall incur
no liability on account of, (i) determining the prudence of the Stock as an
investment, (ii) diversification or selection of investment guidelines for the
Account, (iii) advice on, or management of, or administration of any other
assets for the Client, (iv) except as provided in the trust agreement between
State Street and the Client, filing of any tax or information returns or forms,
withholding or paying any taxes, or seeking any exemption or refund, (v)
registration with any government or agency, or (vi) administration of the Plan
and Trust investing through this Agreement, and shall be indemnified by the
Client for any loss in carrying out the terms and provisions of this Agreement,
including reasonable attorney's fees, fines, taxes, penalties and interest,
unless due to the gross negligence Or intentional misconduct on the part of
State Street or its employees or agents. Client shall maintain the
3
status of the Account as assets of a qualified retirement plan exempt from
taxation and registration and in compliance with ERISA.
6. REPORT: At least once during each period of twelve months, State Street shall
render a report for the Account. Such report shall be delivered in writing to
the Client.
7. ASSIGNABILITY: Neither State Street nor the Client will assign this Agreement
without first obtaining the written consent of the other party.
8. TERMINATION: This Agreement may be terminated by either party hereto upon
thirty (30) days written notice to the other party.
9. APPLICABLE LAW: This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
10. ADDITIONAL RIGHTS: State Street Bank and Trust Company, its officers,
directors and affiliates may (1) give advice to, and manage investments for,
other customers in ways that may be the same as, or different from, its actions
to carry out this Agreement, and/or (2) have a position in tangible property,
commodities, securities, options, futures, savings accounts, cash and/or
short-term items that may be the same as, or different from, the positions
recommended for, or acquired on behalf of, the Client. Third parties dealing
with State Street shall not be required to inquire about its authority or see to
the application of any money or thing of value delivered to it.
11. PARTIAL INTEGRATION: This Agreement contains the entire understanding of the
parties with respect to assets managed hereunder and there are no other
warranties or representations expressed or implied, with respect to such
management. No amendments shall be effective unless in writing. This Agreement
creates no changes in any separate contract between the parties.
IN WITNESS WHEREOF, the parties hereto have executed this document effective as
of the date stated above.
By: /s/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: SVP
State Street Bank and Trust Company
By: /s/ XXXXXXXXX X. XXXXX
Name: Xxxxxxxxx X. Xxxxx
Title: Vice President
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SCHEDULE 1
DUTIES DELEGATED BY CLIENT TO STATE STREET
1. Liquidity Management of the Account
Setting, monitoring and maintaining necessary liquidity for the general
operation of the Plan
2. Proxy and Tender Issues for Stock
Monitoring, evaluating and voting and tendering of all Stock in accordance with
Plan and ERISA.
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