Exhibit 10.5
MASTER TRUST AGREEMENT
This Trust Agreement is made and entered into as of January 17, 2000 by and
between Vencor, Inc. ("Vencor") and Norwest Bank Minnesota, National
Association, a national banking association, as the Trustee (the "Trustee");
Recitals
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A. Vencor maintains Vencor, Inc. Retirement Savings Plan ("VRSP") and the
Retirement Savings Plan for Certain Employees of Vencor and its Affiliates
("RSP"), each of which is intended to qualify under section 401(a) of the
Internal Revenue Code of 1986 (together, the "Plans").
B. Vencor may decide in the future to designate additional defined
contribution plans maintained by Vencor or an affiliate as Plans funded
through this trust.
C. Vencor maintains a master trust fund with Wachovia Bank of North Carolina,
N.A. as trustee (the "Prior Trustee"), and the Prior Trustee has indicated
that it cannot accommodate Vencor's desire to provide daily pricing on all
securities in the Plans.
D. The duties of the Prior Trustee will cease on January 31, 2000 and Vencor
desires to enter into a master trust agreement effective February 1, 2000
which will amend and restate the trust agreement for the Plans.
E. The parties enter into this Agreement for the purpose of continuing the
trust with Norwest Bank Minnesota National Association as successor
Trustee.
Agreement
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NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties agree as follows:
ARTICLE 1--GENERAL
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1.1 Establishment. Vencor hereby continues with Trustee as successor to
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the Prior Trustee, the Vencor Master 401(k) Trust. The Trust will consist of
Investment Funds designated from time to time by the Committee, suitably
distinct in investment characteristics and objectives, from which participants
in the Plans may choose for investment of assets in their accounts. The Trustee
shall allocate to and invest contributions as part of each Investment Fund
pursuant to any investment directives made by the Participants and received from
the Committee. Income from investments in each Investment Fund shall be
reinvested in the same Investment Fund.
1.2 Acceptance of Trust. The Trustee accepts its appointment as such,
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effective February 1, 2000 (the "Effective Date").
1.3 Part of Plans. This Trust forms a part of the Plans for which funds
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are held hereunder. Vencor warrants that promptly upon the adoption of any
amendment to a Plan it will furnish the Trustee with a copy of the amendment and
with an appropriate certificate evidencing its due adoption. Vencor further
agrees that no amendment of a Plan shall have the effect of changing the rights,
duties, and liabilities of the Trustee without its written consent. The Trustee
may rely on the latest Plan documents furnished it as above provided without
further inquiry or verification.
1.4 Certification of Fiduciaries and Administrator. The Secretary or an
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Assistant Secretary of Vencor will certify to the Trustee the name of the person
or persons who comprise the Retirement Committee or who otherwise have authority
on behalf of Vencor to direct the Trustee as to disbursements from the Trust
Fund for purposes of the Plan and the name of the person or persons who have
authority on behalf of Vencor (including representatives of any plan service
provider which Vencor may use from time to time) to communicate with the Trustee
with respect to any other matters relating to the Trust Fund. The Trustee shall
recognize the Retirement Committee as so certified as the administrator of each
Plan within the meaning of the Plan document unless and until receipt from the
Secretary of Vencor or an Assistant Secretary of Vencor of a certification
evidencing the appointment of some other person or persons as said
administrator. The Secretary or an Assistant Secretary of Vencor shall provide
the Trustee with a specimen signature of each of the persons referred to above.
Action by the Board of Directors of Vencor (or a committee thereof) will be
certified by the Secretary or an Assistant Secretary of Vencor. The Trustee may
rely on the latest relevant certificate without further inquiry or verification.
1.5 Construction and Applicable Law. This Trust is intended to constitute
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a qualified trust under section 401(a) of the Internal Revenue Code and to be
entitled to tax exemption under section 501(a) thereof. The Trustee may assume,
until advised to the contrary, that the Trust is so qualified and is entitled to
said tax exemption. It is also intended that this Trust be in full compliance
with applicable requirements of the Plan. This Trust Agreement shall be
construed and administered consistent with said intent.
1.6 Committee. The Board of Directors of Vencor has, pursuant to the
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provisions of the Plans, appointed a Retirement Committee ("Committee") to
administer the Plan, keep records of individual participant benefits, and notify
each Participant of the amount of his benefits periodically. The operation of
the Committee shall be governed by the terms of the Plans. Vencor will notify
the Trustee of the names of the members of the Committee and of any changes in
membership that may take place from time to time. The Committee, or its agent or
designee, shall direct the Trustee in writing to make payments from the Trust
Fund to Participants who qualify for such payments under the terms of the Plan.
Such written order (which may be conveyed by facsimile) to the Trustee shall
specify the name of the Participant,
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his Social Security number, his address, and the amount and frequency of such
payments. The Trustee may request instructions in writing from the Committee, or
its agent or designee, on other matters and may rely and act thereon. The
Committee may further delegate its authority hereunder to direct the Trustee,
and if it does so shall notify the Trustee in writing of that delegation. The
Committee shall be responsible for the determination of individual accounts, and
the Trustee need not segregate accounts among Participants for investment
purposes, except as indicated in the Plans.
1.7 Defined Terms. All defined words and phrases in Article 1 of the
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VRSP, when used in this Trust Agreement, shall have the same meaning as given in
Article 1 of the VRSP, unless a different meaning is clearly required by the
context.
ARTICLE 2--PARTICIPATING PLANS
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2.1 Participating Plans. Vencor may direct that plans other than VRSP and
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RSP participate in the Trust provided that any such other plan:
(a) is created or organized in the United States as a pension or
profit sharing plan established by Vencor, or an affiliate of
Vencor, for the exclusive benefit of employees and their
beneficiaries;
(b) is qualified under Code section 401(a); and
(c) adopts this Trust as a trust for purposes of the plan.
A participating Plan may continue to participate so long as it satisfies the
foregoing conditions. It shall be the duty of Vencor to notify the Trustee if
such conditions cease to be satisfied with respect to any participating Plan,
and in the absence of such notification, the Trustee shall be entitled to assume
that a participating Plan continues to satisfy such conditions.
2.2 Interest of Plan In Trust Fund. Vencor may specify that all or a part
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of a Plan's interest in the Trust Fund be held in a segregated account for that
Plan and invested separately from the remainder of the Trust Fund. In such
event, assets of such segregated account shall be held and administered solely
for that Plan. Except in cases of such segregation, no participating Plan shall
have any right, title or interest in or to any specific asset of the Trust Fund,
but shall have an undivided beneficial interest in the assets of the Trust Fund
not so segregated.
2.3 Withdrawal on Disqualification. Upon receipt of notice from Vencor of
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the disqualification under Code Section 401(a) of any participating Plan, the
Trustee shall determine the value of the interest of such Plan in the Trust Fund
and withdraw and segregate the interest of such Plan. The Trustee shall
continue to hold the interest of a disqualified Plan as a separate trust,
governed by the provisions of this Trust Agreement, until directed by Vencor to
transfer such segregated interest pursuant to Section 2.4.
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2.4 Transfer to Alternate Funding Agency. Vencor, by written direction
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delivered to the Trustee, may direct the withdrawal and transfer of assets
constituting all or a part of the interest of a participating Plan in the Trust
Fund to a successor funding agency, which may be the Trustee acting under a
separate trust agreement. The Trustee shall make the transfer as soon as
practicable, either in cash, or in the discretion of the Trustee, in other
property or partly in cash and partly in other property.
2.5 Merger or Split-up of Plans. If two or more Plans are merged into a
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single Plan, or if a Plan is divided into two or more Plans, the resulting Plan
or Plans shall continue to participate in this Trust unless Vencor directs the
Trustee to make a transfer of assets with respect to such Plan or Plans to an
alternate funding agency pursuant to Section. 2.4. The Trustee shall make such
adjustments of the accounts maintained for each Plan under Section. 3.3 as are
appropriate to reflect any such merger or split-up of Plans.
ARTICLE 3--TRUST FUND
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3.1 Composition. All assets of the trust for the Plan(s) named in the
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recitals to this Trust Agreement, all other sums of money, securities and other
property acceptable to the Trustee and received by it to be held in trust
hereunder, as evidenced by its receipts, from whatever source received, together
with all investments made therewith, the proceeds thereof, and all earnings and
accumulations thereon, and the part thereof from time to time remaining, shall
be held and administered by the Trustee, in trust, in a fund referred to herein
as the "Trust Fund," in accordance with the terms and provisions hereof. The
Trust Fund shall be held, administered, and disbursed by the Trustee without
distinction between principal and income.
3.2 Contributions. The Trustee shall have no duty to require any
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contributions to be made to it, to determine that the contributions received by
it comply with the provisions of the Plans or with any applicable resolution of
the board of directors of any Participating Employer providing therefor, or to
collect any contributions payable to it pursuant to the Plans. The
responsibility of the Trustee shall be limited to the sums of money, securities,
and other property actually received by it.
3.3 Separate Accounting For Each Plan. The Trustee need not maintain
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separate accounts to reflect the interest of each Plan participating in the
Trust Fund.
3.4 Exclusive Benefit of Participants and Beneficiaries. The Trust Fund
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shall be used for the exclusive benefit of the Participants and their
beneficiaries covered by the participating Plans. No assets of any
participating Plan shall be available to pay benefits to participants and their
beneficiaries of any other participating Plan. Nothing herein, however, shall
be construed to prevent any right of return or refund of assets of the Trust
Fund to an employer as authorized under any participating Plan or to restrict
the use of such assets for the payment of taxes,
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expenses of administration or other charges properly assessed against the Trust
Fund under any participating Plan or pursuant to this Trust Agreement.
ARTICLE 4--TRUSTEE
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4.1 General Responsibility. The general responsibilities of the Trustee
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shall be as follows:
(a) The Trustee shall hold, administer, invest and reinvest, and
disburse the Trust Fund in accordance with the powers and subject
to the restrictions stated herein.
(b) The Trustee shall disburse monies and other properties from the
Trust Fund on direction of Vencor pursuant to the provisions of
the Plans at the time or times to the payee or payees specified
by Vencor in directions to the Trustee in such form as the
Trustee may reasonably require. The Trustee shall be under no
liability for any distribution made by it pursuant to such
directions and shall be under no duty to make inquiry as to
whether any distribution made by it pursuant to any such
direction is made pursuant to the provisions of the Plans. The
receipt of the payee shall constitute a full acquittance to the
Trustee.
(c) The Trustee shall have the responsibilities, if any, expressly
allocated to it by the Plans. Except as responsibilities may be
expressly so allocated, the Trustee in its capacity as such shall
have no responsibility or authority with respect to the operation
and administration of the Plans, and the rights, powers, and
duties of the Trustee shall be governed solely by the terms of
this Trust Agreement without reference to the provisions of the
Plans.
4.2 Powers of Trustee. The Trustee shall have the right, power, and
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authority to take any action and to enter into and carry out every agreement
with respect to the Trust Fund that may be necessary or advisable to discharge
its responsibilities hereunder, and without limiting the generality of the
foregoing and in addition to all other powers and authorities herein elsewhere
specifically granted to the Trustee, the Trustee shall have the following powers
and authorities to be exercised in its absolute discretion, except as otherwise
expressly provided herein:
(a) To hold securities and other properties in bearer form or in the
name of a nominee or nominees without disclosing any fiduciary
relationship; provided, however, that on the books and records of
the Trustee such securities and properties shall constantly be
shown to be a part of the Trust Fund, and no such registration or
holding by the Trustee shall relieve it from liability for the
safe custody and proper disposition of such securities and
properties in accordance with the terms and provisions hereof.
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(b) To sell, grant options to buy, transfer, assign, convey,
exchange, mortgage, pledge, lease or otherwise dispose of any of
the properties comprising the Trust Fund at such prices and on
such terms and in such manner as it may deem proper, and for
terms within or extending beyond the duration of the Trust.
(c) To manage, administer, operate, lease for any number of years,
regardless of any restrictions on leases made by fiduciaries,
develop, improve, repair, alter, demolish, mortgage, pledge,
grant options with respect to, or otherwise deal with any real
property or interest therein at any time held by it; and to cause
to be formed a corporation or trust to hold title to any such
real property with the aforesaid powers, all upon such terms and
conditions as may be deemed advisable.
(d) To renew or extend or participate in the renewal or extension of
any note, bond or other evidence of indebtedness, or any other
contract or lease, or to exchange the same, or to agree to a
reduction in the rate of interest or rent thereon or to any other
modification or change in the terms thereof, or of the security
therefor, or any guaranty thereof, in any manner and to any
extent that it may deem advisable in its absolute discretion; to
waive any default, whether in the performance of any covenant or
condition of any such note, bond or other evidence of
indebtedness, or any other contract or lease, or of the security
therefor, and to carry the same past due or to enforce any such
default as it may in its absolute discretion deem advisable; to
exercise and enforce any and all rights to foreclose, to bid in
property on foreclosure; to exercise and enforce in any action,
suit, or proceeding at law or in equity any rights or remedies in
respect to any such note, bond or other evidence of indebtedness,
or any other contract or lease, or the security therefor; to pay,
compromise, and discharge with the funds of the Trust Fund any
and all liens, charges, or encumbrances upon the same, in its
absolute discretion, and to make, execute, and deliver any and
all instruments, contracts, or agreements necessary or proper for
the accomplishment of any of the foregoing powers.
(e) To use the assets of the Trust Fund, whether principal or income,
for the purpose of improving, maintaining, or protecting property
acquired by the Trust Fund, and to pay, compromise, and discharge
with the assets of the Trust Fund any and all liens, charges, or
encumbrances at any time upon the same.
(f) To hold uninvested such cash funds as may appear reasonably
necessary to meet the anticipated cash requirements of the
Plan(s) from time to time and to deposit the same or any part
thereof, either separately or together
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with other trust funds under the control of the Trustee, in its
own deposit department or to deposit the same in its name as
Trustee in such other depositories as it may select.
(g) To receive, collect, and give receipts for every item of income
or principal of the Trust Fund.
(h) To institute, prosecute, maintain, or defend any proceeding at
law or in equity concerning the Trust Fund or the assets thereof,
at the sole cost and expense of the Trust Fund, and to
compromise, settle, and adjust any claims and liabilities
asserted against or in favor of the Trust Fund or of the Trustee;
but the Trustee shall be under no duty or obligation to
institute, maintain, or defend any action, suit, or other legal
proceeding unless it shall have been indemnified to its
satisfaction against any and all loss, cost, expense, and
liability it may sustain or anticipate by reason thereof.
(i) To vote all stocks and to exercise all rights incident to the
ownership of stocks, bonds, or other securities or properties
held in the Trust Fund and to issue proxies to vote such stocks;
to enter into voting trusts for such period and upon such terms
as it may determine; to give general or special proxies or powers
of attorney, with or without substitution; to sell or exercise
any and all subscription rights and conversion privileges; to
sell or retain any and all stock dividends; to oppose, consent
to, or join in any plan of reorganization, readjustment, merger,
or consolidation in respect to any corporation whose stocks,
bonds, or other securities are a part of the Trust Fund,
including becoming a member of any stockholders' or bondholders'
committee; to accept and hold any new securities issued pursuant
to any plan of reorganization, readjustment, merger,
consolidation, or liquidation; to pay any assessments on stocks
or securities or to relinquish the same; and to otherwise
exercise any and all rights and powers to deal in and with the
securities and properties held in the Trust Fund in the same
manner and to the same extent as any individual owner and holder
thereof might do.
(j) To make application for any contract issued by an insurance
company to be purchased under a Plan, to accept and hold any such
contract, and to assign and deliver any such contract.
(k) To employ such agents, experts, counsel, and other persons (any
of whom may also be employed by or represent the Participating
Employers) deemed by the Trustee to be necessary or proper for
the administration of the Trust; to rely and act on information
and advice furnished by such agents, experts, counsel, and other
persons; and to pay their reasonable
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expenses and compensation for services to the Trust from the
Trust Fund. Notwithstanding the foregoing, no person so serving
may receive compensation from the Trust Fund for fiduciary
services if such person, natural or otherwise, is affiliated with
Vencor, and no person so serving who already receives full-time
pay from any Participating Employer shall receive compensation
from the Trust Fund, except for reimbursement of expenses
properly and actually incurred.
(l) To pay out of the Trust Fund all real and personal property
taxes, income taxes, and other taxes of any and all kinds levied
or assessed under existing or future laws against the Trust Fund,
without any approval or direction of Vencor.
(m) To pay any estate, inheritance, income, or other tax, charge, or
assessment attributable to any benefit which, in the Trustee 's
opinion, it shall be or may be required to pay out of such
benefit; and to require, before making any payment, such release
or other document from any taxing authority and such indemnity
from the intended payee as the Trustee shall deem necessary for
its protection.
(n) To retain any funds or property subject to any dispute without
liability for the payment of interest, and to decline to make
payment or delivery thereof until final adjudication is made by a
court of competent jurisdiction.
(o) To provide ancillary services to the Trust for not more than
reasonable compensation.
(p) To serve not only as Trustee but also in any other fiduciary
capacity with respect to the Plans pursuant to such agreements or
practices as the Trustee considers necessary or appropriate under
the circumstances.
(q) To participate in and use the Federal Book-entry Account System
(a service provided by the Federal Reserve Bank for its member
banks for deposit of Treasury securities), or to use the
Depository Trust Company, Midwest Trust Company or other
generally accepted central depositories.
(r) To make, execute, acknowledge, and deliver any and all documents
of transfer and conveyance and any and all other instruments that
may be necessary or appropriate to carry out the powers herein
granted to the Trustee.
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(s) To bring action before any court of competent jurisdiction for
instructions with respect to any matter pertaining to the
interpretation of this Trust Agreement or the administration of
the Trust Fund.
4.3 Compensation and Expenses. The Trustee shall be entitled to receive
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such reasonable compensation for its services as Trustee or in any other
capacity in connection with the Plans as may be agreed upon with Vencor. Its
initial fees shall be as set forth on Annex A hereto, which fees may not
increase prior to January 31, 2003. Except for the restriction on changes in
the preceding sentence, the Trustee's fees may be amended at any time by 60 days
advance written notice from the Trustee to the Committee, provided that, if the
Committee objects in writing to the change within that 60 days period, the fees
may not change as so noted, although the Trustee reserves the right to resign if
no change is agreed upon. Such fees shall be deducted by the Trustee from the
earnings or corpus of the Trust Fund, unless first paid by the Employer, with
the exception of any expenses which are specifically indicated on Annex A as
requiring Employer direction before payment from the Trust. The Trustee shall
be entitled to reimbursement for all reasonable and necessary costs, expenses,
and disbursements incurred by it in the performance of such services, including
costs, expenses and disbursements relating to representation of the Trust Fund's
interests in Vencor's bankruptcy proceedings. All necessary expenses that may
arise in connection with the administration of the Plans and Trust will be paid
from the Trust, unless otherwise paid by the Employer.
4.4 Records and Accountings. The Trustee shall keep accurate and detailed
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records and accounts of all investments, receipts, and disbursements, and other
transactions hereunder, and all records, books, and accounts relating thereto
shall be open to inspection by any person designated by Vencor at all reasonable
times. Within 30 days following the close of each calendar month, quarter and
year, the Trustee shall file with the Employer a written report setting forth
all investments, receipts and disbursements and other transactions during such
period. Such reports shall contain an exact description of all securities
purchased, exchanged or sold, the cost or net proceeds of sale, and shall show
the securities and investments held at the end of such period, and the cost of
each item, as carried on the books of the Trustee. The accounting shall also
furnish Vencor such other information as the Trustee may possess and as may be
necessary for them to comply with the reporting requirements of the Plan. If
the fair market value of an asset in the Trust Fund is not available, when
necessary for accounting or reporting purposes the fair value of the asset shall
be determined in good faith by the Trustee, assuming an orderly liquidation at
the time of such determination. If there is a disagreement between the Trustee
and anyone as to any act or transaction reported in an accounting, the Trustee
shall have the right to have its account settled by a court of competent
jurisdiction. The Trustee shall make such other reports as may be agreed upon
with Vencor.
4.5 Record Retention. The Trustee shall retain its records relating to
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the Trust as long as necessary for the proper administration thereof and at
least for any period required by the Plan or other applicable law.
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ARTICLE 5--INVESTMENTS
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5.1 General. Except as otherwise expressly provided herein, the Trustee
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shall invest and reinvest the Trust Fund in such securities or other property
consistent with the investment objectives set forth in the Plans or by the
Committee from time to time, and without limiting the generality of the
foregoing, shall also be subject to the following:
(a) Investments shall be as consistent as reasonably possible with
any funding policy communicated to the Trustee in writing by
Vencor pursuant to the Plan(s). The Trustee may rely on the
latest such communication received by it without further inquiry
or verification.
(b) The Trustee may invest and reinvest principal and income of the
Trust Fund in common, preferred, and other stocks of any
corporation; voting trust certificates; interests in investment
trusts, including, without limiting the generality thereof,
participations issued by an investment company as defined in the
Investment Company Act of 1940, as from time to time amended;
bonds, notes, and debentures, secured or unsecured; mortgages on
real or personal property; conditional sales contracts; real
estate and leases; and limited partnerships.
(c) The Trustee shall have full power and authority to invest money
or assets of this trust in any collective investment fund of a
bank or trust company consisting of assets of employee benefit
trusts and qualifying as a group trust under Section 401 of the
Code. The governing document of any such fund in which assets of
this trust are invested is hereby incorporated and made a part
hereof as if fully set forth at length herein. Assets of this
trust invested in such fund shall be held and administered by the
trustee of the fund in accordance with the terms of and under the
powers granted in said governing document.
(d) The Trustee may invest and reinvest the principal and income of
the Trust Fund by investing in an annuity contract or contracts
(including any agreement or agreements supplemental thereto)
issued by an insurance company.
(e) The Trust is currently invested in the common stock of Vencor and
Ventas, Inc. (which was acquired by the Trust Fund upon a
spinnoff from Vencor) (together, "Company Stock") although future
investments in Company Stock ceased prior to the effective date
of this Agreement, in the case of Ventas, Inc. because it was no
longer affiliated with Vencor, and, in the case of Vencor stock,
due to the loss of market liquidity and declining value of the
stock.
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(f) If Company Stock is directed by a Participant to be sold as
allowed by the Plan, and if there is no generally recognized
market for such securities, the sale shall be for not less than
fair market value, as determined in good faith by the Trustee.
In no event may a commission be charged to the Trust Fund for the
private purchase or sale of Company Stock.
(g) The Trustee may invest and reinvest principal and income of the
Trust Fund in deposits (including savings accounts, savings
certificates, and similar interest-bearing instruments or
accounts) in itself or its affiliates, provided such deposits
bear a reasonable rate of interest.
(h) The Trustee may lend any securities or security from time to time
constituting a part of the Trust Fund in exchange for such
consideration and upon such terms and conditions as the Trustee
deems appropriate. In any such transaction the Trustee may
transfer legal title to the securities being loaned to the
obligor, and may permit the obligor to return to the Trust Fund
securities that are identical (but not necessarily evidenced by
the same certificates) to those transferred to it by the Trustee
hereunder.
(i) The Trustee may transfer, at any time and from time to time, all
or any part of the funds of the Trust to any trust which is
qualified under section 401(a) and exempt under section 501(a) of
the Internal Revenue Code and is maintained as a medium for the
pooling of a portion of the funds of pension and profit sharing
trusts for diversifying investments, and may execute such
documents and other instruments as may be necessary in connection
therewith. The terms and provisions of any such trust shall,
upon such transfer and execution, be incorporated by reference
into this Trust Agreement to the extent of the assets so
transferred.
5.2 Appointment of Investment Adviser as Investment Manager. Vencor may
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appoint one or more parties that are registered as investment advisers under the
Investment Advisers Act of 1940 to serve as an investment manager as specified
in the Plan. The appointment of any such investment manager and investment of
the Trust Fund pursuant to such appointment shall be subject to the following,
notwithstanding any provisions hereof to the contrary:
(a) Written notice of each such appointment shall be given to the
Trustee a reasonable time in advance of the effective date of the
appointment. The notice shall state what portion of the Trust
Fund is to be invested by the investment manager and shall direct
the Trustee to segregate such portion of the Trust Fund into a
separate account for the investment manager. Each such separate
account is referred to in this section as an Investment Account.
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(b) The Trustee shall not act on any direction or instruction of the
investment manager until the Trustee has been furnished with an
acknowledgement in writing by the investment manager that it is a
fiduciary with respect to the Investment Account.
(c) There shall be a written agreement between Vencor and each
investment manager. The Trustee shall receive a copy of each
such agreement and all amendments thereto and shall give written
acknowledgement of receipt of same. Each agreement with an
investment manager shall provide that:
(1) All directions given by an investment manager to the Trustee
shall be in writing, signed by an officer or partner of the
investment manager or by such other person as may be
designated in writing by the investment manager; provided
that the Trustee shall accept oral directions for the
purchase or sale of securities, which shall be confirmed by
such authorized personnel of the investment manager in
writing;
(2) All settlements of purchases and sales shall be in the city
where the Trustee is located, or such other place as the
Trustee may direct;
(3) In all events the Trustee is to retain physical custody of
or title to all assets included in an Investment Account;
and
(4) Vencor, by written notice to the investment manager and the
Trustee, may modify or terminate the authority of the
investment manager.
(d) Payment of the cost of the acquisition, sale, or exchange of any
security or other property for an Investment Account shall be
charged to that Investment Account unless the agreement between
Vencor and investment manager provides otherwise.
(e) So long as the appointment of an investment manager is in effect,
the investment manager shall have full power and authority to
direct the Trustee as to, and full responsibility for, investment
of its Investment Account and for the retention and disposition
of any assets in its Investment Account. Subject to any
limitations in the agreement between Vencor and the investment
manager, the investment manager shall have the same investment
discretion as is accorded the Trustee under Sec. 5.1. The
Trustee may invest any portion of an Investment Account that
would otherwise be held in cash but has no obligation to do so.
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(f) Unless the written agreement between Vencor and investment
manager expressly provides to the contrary, the Trustee shall
have the voting power with respect to all stocks and other
securities in the Investment Account.
(g) The Trustee shall make available to an investment manager copies
of or extracts from such portions of its accounts, books, or
records relating to the Investment Account of such investment
manager as the Trustee may deem necessary or appropriate in
connection with the exercise of the investment manager's
function, or as Vencor may direct.
(h) All charges (other than those covered in subsection (d) above)
against each Investment Account shall be made in such proportions
as Vencor may direct from time to time.
(i) If the authority of an investment manager is terminated and a
successor investment manager is not appointed, the assets held in
its Investment Account may or may not continue to be segregated
as the Trustee may determine. Until receipt of written notice of
the termination of the authority of an investment manager, the
Trustee shall be fully protected in assuming the continuing
authority of such investment manager.
(j) Any direction by an investment manager shall be complete as to
the terms with respect thereto, it being intended that the
Trustee shall have no obligation whatsoever to invest or
otherwise manage any asset of an Investment Account.
(k) Vencor agrees to indemnify the Trustee for and to hold it
harmless against any and all liabilities, losses, costs, or
expenses (including legal fees and expenses) of whatsoever kind
and nature which may be imposed on, incurred by, or asserted
against the Trustee at any time by reason of action taken in
accordance with directions of an investment manager or action
omitted because no such directions are given. However, no such
indemnification shall be required in any case in which such
liabilities, losses, costs, or expenses are incurred by the
Trustee because it participated knowingly in, or knowingly
undertook to conceal, an act or omission of an investment
manager, knowing such act or omission was a breach of fiduciary
duty by said investment manager.
5.3 Committee Directed Investment Funds; Participant Directed Accounts.
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The Trustee shall be a directed Trustee only, with no discretionary authority or
responsibility, with respect to the assets of the Plans allocated or allocable
to the accounts of the Participants. The Committee, as a named fiduciary, shall
be solely responsible for the investment of the assets of the Plans allocated or
allocable to the accounts of Participants (except as provided more specifically
in
13
paragraph (i) immediately below or by Section 5.2 of the Trust). Without
limitation, the Committee, as named fiduciary:
(a) shall be responsible for investing such assets, except to the extent
that such investment responsibility is delegated to one or more
investment managers (other than the Trustee) under Section 403(a)(2)
of ERISA;
(b) shall, to the extent that Participants and their Beneficiaries are
given the right to direct the investment of their accounts, be the
fiduciary to whom Participants and Beneficiaries are entitled to give
such investment directions and the fiduciary responsible for carrying
out such investment directions (by directing the Trustee or
otherwise);
(c) shall be responsible for any loss, or by reason of any breach, which
results from the Participant's or Beneficiary's exercise of control
over his account, except to the extent that Section 404(c) of ERISA
provides otherwise;
(d) shall be responsible for determining whether the documents and
instruments governing the investment of the assets allocated or
allocable to the accounts are consistent with the provisions of Titles
I and IV of ERISA, and if not, investing such assets in accordance
with Titles I and IV of ERISA notwithstanding such documents and
instruments;
(e) all directions given by the Retirement Committee to the Trustee shall
be in writing, signed by the duly authorized person or persons;
provided that the Trustee shall accept oral directions for the
purchase or sale of securities which shall be confirmed by such
authorized personnel in writing; and
(f) any direction by the Retirement Committee shall be complete as to its
terms, it being intended that the Trustee shall have no obligation
whatsoever to invest or otherwise manage any asset of the Trust Fund.
Notwithstanding the above, the Trustee shall be responsible for voting all
securities held by the Trust, including Company Stock, and for making decisions
about tender of Company Stock if a tender offer, reorganization, or other
corporate transaction requires an investment decision, and shall be responsible
for prudently carrying out the investment instructions conveyed to it with care,
skill and diligence normally exercised by prudent persons familiar with like
matters. If a proxy is solicited on mutual fund shares held in the Trust with
regard to an issue that might increase fees within the fund or alter its
investment policy, the Trustee shall promptly notify the Committee in writing,
and shall not vote that proxy unless and until directed by the Committee how to
vote.
14
ARTICLE 6--CHANGE IN TRUSTEE
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6.1 Resignation. The Trustee may resign at any time by giving 60 days'
-----------
advance written notice to Vencor.
6.2 Removal. Vencor may remove the Trustee by giving 60 days' advance
-------
written notice to the Trustee.
6.3 Successor. In the event of the resignation or removal of the Trustee,
---------
Vencor shall promptly appoint a successor. If no appointment of a successor is
made by Vencor within a reasonable time after resignation or removal of the
Trustee, any court of competent jurisdiction may appoint a successor, after such
notice, if any, solely to Vencor and the retiring Trustee, as such court may
deem proper and suitable. The retiring Trustee shall be furnished with written
notice from Vencor or the court, as the case may be, of the appointment of the
successor, and shall also be furnished with written evidence of the successor's
acceptance of the trusteeship. Only then shall the retiring Trustee cease to be
such.
6.4 Duties on Succession. Every successor Trustee accepting a trusteeship
--------------------
under this Trust Agreement shall have all the right, title, powers, duties,
exemptions, and limitations of the predecessor Trustee hereunder. No
predecessor Trustee shall have any right, title, or interest in the Trust Fund
except as hereinafter provided. The Trustee shall, upon the appointment and
acceptance of a successor Trustee, transfer and deliver the assets of the Trust
Fund to the successor, after reserving such reasonable amount as it shall deem
necessary to provide for its fees and expenses and any sums chargeable against
the Trust Fund for which it may be liable. Any predecessor Trustee shall do all
acts necessary to vest title of record in the successor Trustee. If any assets
in the Trust Fund have been invested in a common or collective trust fund, the
predecessor shall cause such investment to be liquidated at the earliest
practical time after notice has been given or received by the predecessor of the
resignation or removal. No person becoming a Trustee hereunder shall be in any
way liable or responsible for anything done or omitted to be done by any Trustee
prior to such person's acceptance of the trusteeship, nor shall such person have
any duty to examine the administration of the Trust prior to such acceptance.
6.5 Changes in Organization of Trustee. If any Trustee acting hereunder
----------------------------------
is merged with another corporation or association, or is succeeded by another
corporation or association, through consolidation or otherwise, the acquiring
corporation or association shall thereupon become Trustee hereunder. When
authorized by statute or court order any Trustee acting hereunder may permit
itself to be succeeded as such Trustee by another corporation or association in
which case the acquiring corporation or association shall thereupon become
Trustee hereunder. In each case the acquiring corporation or association shall
be Trustee of the Trust as though specifically so named herein. Notwithstanding
the foregoing provisions of this section, an acquiring corporation or
association shall become Trustee hereunder only if it has trust powers and is
formed under the laws of the United States of America or any subdivision
thereof.
15
ARTICLE 7--MISCELLANEOUS
-------------
7.1 Benefits May Not Be Assigned or Alienated. None of the benefits under
-----------------------------------------
the Plans are subject to the claims of creditors of Participants, Former
Participants or their Beneficiaries and will not be subject to attachment,
garnishment or any other legal process. Neither a Participant, a Former
Participant, a Beneficiary, a contingent Beneficiary, nor a spouse may assign,
sell borrow on or otherwise encumber any of his beneficial interest in this
Trust nor shall any such benefits be in any manner liable for or subject to the
deeds, contracts, liabilities, engagements, or torts of any Participant,
terminated Participant, Beneficiary, contingent Beneficiary or spouse. The
preceding sentences shall also apply to the creation, assignment, or recognition
of a right to any benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined by the Committee to be
a qualified domestic relations order, as defined in Section 414(p) of the Code.
7.2 Evidence. Evidence required of anyone under this Trust Agreement may
--------
be by certificate, affidavit, document, or other instrument which the person
acting in reliance thereon considers to be pertinent and reliable, and to be
signed, made, or presented by the proper party.
7.3 Dealings of Others With Trustee. No person (corporate or individual)
-------------------------------
dealing with the Trustee shall be required to see to the application of any
money paid or property delivered to the Trustee or to determine whether the
Trustee is acting pursuant to any authority granted to it under this Trust
Agreement.
7.4 Audits. Vencor shall have the right to cause the books, records, and
------
accounts of the Trustee that relate to the Trust to be examined and audited by
independent auditors designated by Vencor at such times as Vencor may determine,
and the Trustee shall make such books, records, and accounts available for such
purposes at all reasonable times.
7.5 Trustee Warranty Against Conviction. A person accepting trusteeship
------------------------------------
hereunder warrants that such person has not been convicted of or imprisoned for
a crime preventing such person from serving as Trustee hereunder.
7.6 Successor Employers. The provisions of this Trust Agreement shall be
-------------------
binding on each Participating Employer and its successors. If a successor to a
Participating Employer or a purchaser of all or substantially all of its assets
elects to continue the Trust, such successor or purchaser shall be substituted
for the Participating Employer under this Trust Agreement.
7.7 Waiver of Notice. Any notice required under this Trust Agreement may
----------------
be waived by the person entitled thereto.
7.8 Headings. Headings at the beginning of articles and sections are for
--------
convenience of reference, shall not be considered a part of this Trust
Agreement, and shall not influence its construction.
16
7.9 Use of Compounds of Word "Here". Use of the words "hereof",
-------------------------------
"herein", "hereunder", or similar compounds of the word "here" shall mean and
refer to the entire Trust Agreement unless the context clearly indicates
otherwise.
7.10 Construed as a Whole. The provisions of this Trust Agreement shall
--------------------
be construed as a whole in such manner as to carry out the provisions thereof
and shall not be construed separately without relation to the context.
7.11 Counterparts. This Trust Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original. Such counterparts
shall constitute but one and the same instrument, which may be sufficiently
evidenced by any one counterpart.
7.12 Law Controlling. This Trust Agreement is made in contemplation of
---------------
the laws of the State of Minnesota and shall be construed in accordance with
the laws thereof, except where such laws are superseded by Act or the Code, in
which case such Act or law shall control.
ARTICLE 8--AMENDMENT AND TERMINATION
-------------------------
8.1 No Diversion. The Trust Fund shall be for the exclusive purpose of
------------
providing benefits to participants under the Plans and their beneficiaries and
defraying reasonable expenses of administering the Plans. Such expenses may
include premiums for the bonding of Plan officials required by the Plan document
or applicable law. No part of the corpus or income of the Trust Fund may be
used for, or diverted to, purposes other than for the exclusive benefit of
participants under the Plans or their beneficiaries. Notwithstanding the
foregoing, all contributions made by the Employer are expressly conditioned upon
the initial and continued qualification of the Plans under the Code, and upon
the deductibility of contributions made to the Plans under Section 404 of the
Code. Upon the Employer's request, a contribution which is made by a mistake of
fact, or conditioned upon qualification of the Plans, or any amendment thereof,
or upon the deductibility of contributions, shall be refunded to the Employer
within one year after the payment of the contribution, the denial of the
qualification or the disallowance of the deduction (to the extent disallowed),
whichever is applicable. After the termination of a Plan and the satisfaction of
all liabilities of that Plan to participants and their beneficiaries, any
residual assets remaining in the Trust Fund attributable to that Plan shall be
returned to such Participating Employer or Employers as Vencor may specify. In
the case of any such return of contribution Vencor shall cause such adjustment
to be made to the Accounts of Participants as it considers fair and equitable
under the circumstances resulting in the return of such contribution.
8.2 Amendment. Subject to the provisions of Section 8.1 hereof, this
---------
Trust Agreement may be amended at any time or from time to time and in any
manner by written agreement of the Trustee and Vencor, and the provisions of any
such amendment may be made applicable to the Trust Fund as constituted at the
time of the amendment as well as to the part of the Trust Fund subsequently
acquired. No amendment or modification shall operate to deprive any
Participant, Former Participant, Beneficiary, contingent Beneficiary, or spouse
of any vested rights or benefits accrued to him prior to such amendment or
modification, nor shall any amendment or
17
modification cause or authorize any part of the funds of the Trust to revert to
or be refunded to the Employer, except as indicated in the Plans. Moreover, no
amendment to the Plans or Trust shall decrease the balance of a Participant's
Individual Account or eliminate an optional form of benefit, except as allowed
by ERISA or the Code.
8.3 Termination of Plan. If all the Plans are terminated, this Trust
-------------------
shall nevertheless continue in effect until the Trust Fund has been distributed
in accordance with the provisions of the Plans pursuant to directions under
Section 4.1(c) hereof.
8.4 Transfer to Other Funding Agency. If pursuant to directions under
--------------------------------
Section 4.1(c) hereof the entire Trust Fund is transferred to a funding agency
for the Plans that is not a trustee, this Trust shall thereupon terminate.
ARTICLE 9--LIABILITY OF TRUSTEE
--------------------
9.1 Factual Matters. The Trustee shall be fully protected in relying upon
---------------
the existence of any fact or state of facts represented to it in writing by the
Employer or the Committee.
9.2 Indemnity. Except with respect to fiduciary responsibility for any
---------
error or loss that may result by reason of the exercise or non-exercise of that
fiduciary responsibility which is allocated to the Trustee hereunder which is
determined to be the result of the Trustee's own negligence or willful
misconduct, the Employer shall indemnify the Trustee, directly from the
Employer's own assets (including the proceeds of any insurance policy the
premiums of which are paid from the Employer's own assets), from and against any
and all claims, demands, losses, damages, expenses (including, by way of
illustration and not limitation, reasonable attorneys' fees and other legal and
litigation costs), judgments and liabilities arising from, out of, or in
connection with the administration of the Plans and Trust. The Trustee shall
not be liable for any action taken by the Trustee or any failure to act by the
Trustee if the action taken or the failure to act was directed by the
Administrator, the Committee, the Company, or an Investment Manager or any other
named fiduciary, if the Trustee reasonably relied on such direction and the
Trustee reasonably believed such direction was consistent with the Act.
9.3 Survival. The indemnity provided by Section 9.2 shall survive the
--------
termination of this Trust Agreement.
9.4 Duty of Care. The Trustee shall discharge its duties hereunder with
------------
the care, skill, prudence and diligence under the circumstances then prevailing
that a prudent person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims.
9.5 Benefit Payments. The Trustee shall be under no obligation to
----------------
determine the amount of benefits to which Participants or their beneficiaries
will be entitled or to keep any records of the respective interest of any
individual Participant or beneficiary in the Plans. The Trustee,
18
upon written instructions from the Committee, shall make payments to the
Participants who qualify for such benefits. The Trustee shall have no liability
to the Employer, Committee, or to any other person in making such payments. The
Trustee shall not be required to determine or make any investigation to
determine the identity or mailing address of any person entitled to benefits and
shall have discharged its obligation in that respect when it shall have sent
checks, securities and other papers by ordinary mail to such person or persons
and addresses as may be certified to it in writing by the Committee.
9.6 No Guarantee. It is recognized that the Trustee does not guarantee
------------
the assets of the Trust from loss or depreciation and shall be liable only for
failure to discharge his duties in accordance with this Trust Agreement.
9.7 Prior Trustee. Trustee shall not be liable, responsible, or required
-------------
to account to Vencor for the acts of Prior Trustee under the Trust, shall be
entitled to indemnity pursurant to Section 9.2 hereof therefor, and shall be
liable under the Trust as provided herein and only with respect to the assets of
the Trust and the accounts and records of the Trust when, and if, delivered to
it. Trustee agrees to discharge all the duties, obligations and responsibilities
imposed on the Trustee in accordance with the terms of the Trust.
IN WITNESS WHEREOF, Vencor and the Trustee have caused this Trust
Agreement to be executed by their duly authorized officers as of the day and
year first above written, to be effective on the Effective Date.
NORWEST BANK MINNESOTA, VENCOR, INC.
NATIONAL ASSOCIATION
By:__________________________ By:______________________________
Name:________________________ Name:____________________________
(please print) (please print)
Title:_______________________ Title:___________________________
Date:________________________ Date:____________________________
19
ANNEX A TO
MASTER TRUST AGREEMENT
Trustee Fee Schedule
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20
