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Exhibit (10)NN.
DIRECTORS' DEFERRED COMPENSATION PLAN
This Agreement, made this 17th day of December , 1984 by and between
Collective Federal Savings and Loan Association (the "Association") and the
Board of Directors of Collective Federal Savings and Loan Association (the
"Board").
Whereas, the parties hereto are desirous of providing a method for
deferring the payment of directors' fees to electing members of the Board; and
providing for the payment of interest on such deferred fees until the date of
distribution.
NOW THEREFORE, effective as of the date first above written, and in
consideration of the prior and continuing services of the members of the Board,
set forth below is a mutually agreed upon Directors' Deferred Compensation Plan
(the "Plan"):
1. Election to Defer Compensation
Directors' fees earned by each Board member during calendar year 1985 and
during subsequent calendar years shall be paid on a current basis, unless, at
least ten (10) days prior to the commencement of any such calendar year, the
Board member has delivered a written notice requesting that all or a designated
portion of the directors' fees to be earned in the forthcoming year by such
Board member be deferred, in which event the requested amounts shall be credited
as Deferred Compensation hereunder and shall be treated in the manner
hereinafter provided. Any such notice given by a Board member shall, unless
otherwise stated therein, be deemed to be a continuing election which shall be
effective for each subsequent calendar year until revoked.
2. Net Income Upon Deferred Compensation
Deferred Compensation which shall be accumulated under the terms of this
Plan during calendar year 1985, together with all further Deferred Compensation
accrued by a Board member hereunder in subsequent years, shall be credited with
interest (referred to herein as "Net Income") annually in the manner set forth
below.
(a) An initial Net Income calculation for any calendar year shall be made
by multiplying the aggregate amount of Deferred Compensation and Net Income
accrued thereon, if any, credited to the account of a participating Board member
prior to said year by the decimal fraction which represents a rate of return
equal to the consolidated yield, including fees, on earning assets of the
Association and its subsidiaries for that calendar year or such other rate as
the Board may hereafter select, provided that any change in rate made by the
Board shall be communicated to participating Board members and shall, except to
the extent participating Board members otherwise agree, be effective on a
prospective basis only.
(b) A second Net Income calculation for any calendar year shall be made by
multiplying the amounts of Deferred Compensation, if any, credited during such
year by the annual rate
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specified in Paragraph 2(a) above. For purposes of this second calculation, the
Deferred Compensation credited during any calendar year shall be treated as
having been credited in twelve (12) equal installments as of the last day of
each month during said calendar year, and the rate specified in Paragraph 2(a)
above shall be appropriately adjusted as to each assumed monthly credit to
reflect the foregoing assumption that such Deferred Compensation has been
credited in twelve (12) equal monthly installments.
(c) The total amount of Net Income accrued with respect to Deferred
Compensation in any calendar year shall be the sum of the amounts calculated as
provided in Paragraphs 2(a) and (b) above.
(d) Net income shall continue to be credited upon the remaining unpaid
balance of all Deferred Compensation and all Net Income therefore accrued
thereon until such date as the remaining balances are totally distributed to the
Board member as hereinafter provided; provided, that in the final calendar year
in which distributions are made to a Board member hereunder, the rate referred
to in Paragraph 2(a) above shall be the corresponding rate for the month in
which the final distribution is made.
3. Plan Committee, Distributions
(a) This Plan shall be administered by a Committee (the "Committee")
composed of three (3) members of the Board duly designated by the Board. No
member of the Committee, while serving as a Committee member, shall be eligible
to receive any form of distribution under the Plan. Decisions and determinations
by the Committee shall be final and binding upon all parties, including the
Association and the participants in this Plan. The Committee shall have the
authority to interpret this Plan, to adopt and revise rules and regulations
relating hereto and to make any other determination which it believes necessary
or advisable for the administration of this Plan. Subject to the terms and
conditions hereof, the Committee shall have exclusive jurisdiction to determine
the time or times at which and the manner in which all amounts credited to Board
members hereunder shall be paid or distributed.
(b) The Committee may from time to time enter into binding agreements with
Board members respecting the times and manner of distribution of any amounts
credited to them hereunder; provided that such agreements shall be entered into
prior to the time that the designated Board member actually terminates his
services as a member of the Board.
(c) All distributions to Board members of Deferred Compensation and Net
Income accrued thereon shall be in the form of cash and, if the Committee and a
Board member have not otherwise agreed pursuant to Paragraph 3(b) above, shall
be made in sixty (60) monthly installments commencing in the month subsequent to
the month in which the Board member actually terminates his service as a member
of the Board. In addition, within sixty (60) days after the end of each calendar
year in which distributions are made hereunder (or, in the case of the final
year in which distributions are made, within sixty (60) days of the date after
the date of such final distribution), the Association shall pay to the Board
member or other person entitled thereto, the amount of any Net Income which
accrued during such year (or final portion of a
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year) under the terms of this Plan upon the theretofore unpaid balance of the
Deferred Compensation, and Net Income accrued thereon, for the account of such
Board member.
(d) All amounts credited to a Board member hereunder shall be paid or
distributed to the Board member or, in the event of his death, to the parties
designated by such Board member pursuant to written instructions delivered by
the Board member to the Committee, which instructions may be revoked or amended
by the Board member in any manner whatsoever prior to death and without the
consent of the prior beneficiary. In the event that no such written instructions
have been given hereunder prior to the time of death, the amount credited
hereunder shall be paid or distributed to the Board member's estate.
4. Nature of Association Obligation
(a) Nothing in this Agreement shall be deemed to require the Association
to deposit, invest or set apart in trust or otherwise any amounts of cash, stock
or property equal to or reflective of any of its obligations hereunder, whether
by reason of Deferred Compensation, Net Income or otherwise. Nothing contained
herein shall be deemed to give any Board member participating in this Plan any
ownership or other proprietary, security or other rights in any funds, stock or
assets owned or possessed by the Association whether or not earmarked for the
Association's own purposes as a reserve or fund to be utilized by the
Association for the discharge of its obligations hereunder, it being understood
that the definitions of Deferred Compensation and Net Income set forth herein
are intended simply as formulae for computing benefits hereunder. To the extent
that any person acquires a right to receive payments or distributions from the
Association under this Plan, such right shall be no greater than the right of
any unsecured creditor of the Association.
(b) To the extent permitted by law, the rights of any Board member or any
beneficiary of a Board member hereunder shall not be subject in any manner to
attachment or other legal process for the debt of such Board member or
beneficiary; and any such benefit or payment shall not be subject to
anticipation, alienation, sale, transfer, assignment or encumbrance.
5. Administrative Provisions
(a) The Board may amend, alter or terminate this Plan from time to time
without the approval of any participating Board members, provided that no such
change may adversely affect vested rights hereunder without the written consent
of the affected participating Board members or their representatives. All
obligations and rights under this Plan shall be binding upon the participating
Board members, their heirs, beneficiaries, administrators, executors and
assigns, and upon the successors and assigns of the Association.
(b) Any notice required or desired to be given to the Association or a
participating Board member hereunder shall be given in writing. Any such notice
to the Association shall be addressed to the "Board of Directors Deferred
Compensation Committee" at the Association's then executive headquarters office,
and any such notice to a participating Board member may be addressed to the
address designated by such Board member from time to time. Any such notice shall
be sufficiently given by personal delivery thereof or by mailing the same
postpaid,
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addressed to the party to whom such notice is being given as herein specified,
and the date of such personal delivery or mailing shall be deemed to be the date
such notice is given.
(c) No member of the Committee shall be liable for any action or
determination made in good faith with respect to the Plan and the administration
thereof, and the Association shall indemnify and hold harmless each Committee
member from any action or loss incurred in connection therewith.
IN WITNESS WHEREOF, the parties hereto have affixed their hands and seals
the date first above written.
Collective Federal Savings and Loan Association
by: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, President
/s/ Xxxxx X. Page
-----------------------------------------------
Xxxxx X. Page, Secretary
Board of Directors
Collective Federal Savings and Loan Association
by: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxxx, Director
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxx, Director
/s/ Xxxxxx Xxxxxxxx
-----------------------------------------------
Xxxxxx Xxxxxxxx, Director
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxx, Director
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxxxxx, Director
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------------
Xxxxxx X. Xxxxxx, Director
/s/ Xxxxxx X. Xxxx
-----------------------------------------------
Xxxxxx X. Xxxx, Director
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AMENDMENT NO. 1 TO DIRECTORS
DEFERRED COMPENSATION PLAN
WHEREAS, by resolution duly adopted on December 17, 1984 the board of
Directors of Collective Federal Savings and Loan Association, as predecessors to
the Board of Directors of Collective Federal Savings Bank and Collective
Bancorp, Inc. ("the Board"), adopted a deferred compensation plan (the "Plan)
providing for the deferral of payment of directors fees to electing members of
the Board: and
WHEREAS, the Plan by its terms may be amended by the Board from time to
time in such manner as the Board deems appropriate; and
WHEREAS, the Board desires to amend the Plan to reflect certain changes in
the legal structure of the institution and to provide for the inclusion of
consultants to the Board under the Plan;
NOW, THEREFORE, effective as of January 1, 1989 the Plan is hereby amended
as follows:
1. For purposes of eligibility to defer fees under the Plan, all
references to the Board shall include all members of the Board of Directors of
Collective Bancorp, Inc., the Board of Directors of Collective Federal Savings
Bank and any individual hired to act as non-voting consultant or advisor to the
Board as herein defined;
2. All references to the "Association" shall include Collective Federal
Savings Bank, together with any other insured savings institution subsidiary
which may be acquired by Collective Bancorp, Inc. from time to time;
3. Except as modified herein, all terms and conditions of the Plan shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have affixed their hands and seals
this 9th day of July, 1990.
Collective Bancorp, Inc.
by: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Xxxxxx X. Xxxxxxxx, President
/s/ Xxxxx X. Page
----------------------------------------------
Xxxxx X. Page, Secretary
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Board of Directors of Collective Bancorp, Inc.
by: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxx
----------------------------------------------
Xxxxxx X. Xxxx, Director
/s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxx X. Xxxxxx, Director
/s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxx X. Xxxxxx, Director
/s/ Xxxxx Xxxxxx
----------------------------------------------
Xxxxx Xxxxxx, Director
/s/ Xxxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxxx X. Xxxxxx, Director
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------------------------
Xxxxxx X. Xxxxxxxxx, Director
/s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Xxxxxx X. Xxxxxx, Director
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AMENDMENT NO. 2 TO DIRECTORS
DEFERRED COMPENSATION PLAN
WHEREAS, by resolution duly adopted on December 17, 1984, the Board of
Directors of Collective Federal Savings and Loan Association, as predecessors to
the Board of Directors of Collective Bank and Collective Bancorp, Inc. (the
"Board"), adopted the Directors Deferred Compensation Plan (the "Plan")
providing for the deferral of payment of directors fees to eligible
participants; and
WHEREAS, the Plan by its terms may be amended by the Board from time to
time in such manner as the Board deems appropriate; and
WHEREAS, the Board desires to amend the Plan to provide for certain
changes in the manner in which net income upon deferred compensation is
calculated for each Board member following his termination of service as a
member of the Board,
NOW THEREFORE, effective as of July 22, 1997, the Plan is hereby amended
as follows:
1. At or prior to the time which Collective Bancorp, Inc. is merged with
and into Summit Bancorp, all amounts accrued under a participant's account shall
be credited to a Rabbi Trust Agreement (the "Trust") established with Summit
Bank for the purpose of providing a mechanism for payment of benefits accrued
under the Plan.
2. Upon creation of a participant's account under the Trust, the amount
allocated thereto shall no longer be credited with Net Income as defined in
Section 2 of the Plan. Such balances shall thereafter be invested by the Trustee
in accordance with the written instructions of the participant.
3. Except as modified herein, all terms and conditions of the Plan shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have affixed their hands and seals
this 22nd day of July, 1997.
Collective Bancorp, Inc.
by: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxxx, Chairman
Attest: /s/ Xxxxx X. Page
-----------------------------------------
Xxxxx X. Page, Secretary
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Board of Directors of Collective Bancorp, Inc.
by: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxxx, Director
/s/ Xxxxxx X. Xxxx
-----------------------------------------
Xxxxxx X. Xxxx, Director
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx, Director
-----------------------------------------
Xxxxx Xxxxxx, Director
-----------------------------------------
Xxxxx X. XxxXxxxxxxx, Director
/s/ Xxxxxx X. XxXxxxxx
-----------------------------------------
Xxxxxx X. XxXxxxxx, Director
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx, Director
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxxxxx, Director
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx, Director
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx, Consultant
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RABBI TRUST AGREEMENT
UNDER COLLECTIVE BANCORP.
DIRECTORS DEFERRED COMPENSATION PLAN
THIS TRUST AGREEMENT is made as of the 15th day of July, 1997 by and
between Collective Bancorp. (the "Company") and Summit Bank, a New Jersey
banking corporation with trust powers ("Trustee").
WHEREAS, Company has adopted the non qualified deferred compensation plan
as set forth in Exhibit I at the end hereof (the "Plan"); and
WHEREAS, Company has incurred or expects to incur liability under the
terms of the Plan with respect to the individuals participating in the Plan; and
WHEREAS, Company wishes to establish the trust (the "Trust") with the
Trustee and to contribute to the Trust funds that shall be held therein, subject
to the claims of Company's general creditors in the event of Company's
Insolvency, as herein defined, until paid to the Plan participants and their
beneficiaries in such manner and at such times as specified in the Plan; and
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not adversely affect the status of
the Plan as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
pursuant to Title I of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); and
WHEREAS, it is also the intention of Company to make contributions to the
Trust to provide itself with a source of funds to assist in meeting its
liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
Section 1. Continuation of Trust
(a) From time to time Company shall deposit with Trustee in trust such
sums of money and other property, as the Company shall determine, in its sole
discretion, to contribute, including, without limitation all, funds transferred
from the Predecessor Trustee, which shall become the principal of the Trust, to
be held, administered and disposed of by Trustee as provided in this Trust
Agreement.
(b) The Trust hereby established shall be revocable by the Company.
However, it shall become irrevocable upon a Change of Control, as defined in
Section 14 (d) hereof.
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(c) The Trust is intended to be a grantor trust, of which Company is the
grantor within the meaning of subpart E. part 1, subchapter J, chapter I,
subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and
shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon. shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of Plan participants and general creditors as herein set
forth. Plan participants and their beneficiaries shall have no preferred claim
on, or, any beneficial ownership interest in, any assets of the Trust. Any
rights created under the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries against Company.
Any assets held by the Trust will be subject to the claims of Company's general
creditors under federal and state law in the event of Insolvency, as defined in
Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property, in trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.
(f) Trustee may conclusively rely upon directions from the Plan Committee
established by the Company, in taking any action with respect to this Trust
Agreement, including the making of payments from Trust assets and the investment
of Trust assets pursuant to this Trust Agreement. Trustee shall have no
liability for actions taken, or for failure to act, on the direction of the
Committee. Moreover, Trustee shall have no liability for failure to act in the
absence of proper written directions.
Section 2. Payments to Plan Participants and Their Beneficiaries.
(a) Committee shall deliver to Trustee a schedule (the ("Payment
Schedule") that indicates the amounts payable in respect to each Plan
participant (and his or her beneficiaries), that provides a formula or other
instructions acceptable to Trustee for determining the amount so payable, the
form in which such amount is to be paid (as provided for or available under the
Plan), and the time of commencement for payment of such amounts. Except as
otherwise provided herein, and to the extent Trustee is in possession of
sufficient assets, Trustee shall make payments to the Plan participants and
their beneficiaries in accordance with such Payment Schedule. If Trustee is not
in possession of sufficient assets to make all payments in accordance with the
Payment Schedule, Trustee will pay each participant or beneficiary a
proportionate share of the Trust assets in its possession as directed by the
Committee. If so directed by the Committee, Trustee shall make provision for the
withholding of any federal, state or local taxes that may be required to be
withheld with respect to the payment of benefits pursuant to the terms of the
Plan and shall pay the amounts withheld to the appropriate taxing authorities on
behalf of the Company.
(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan shall be determined by Company or such party as it shall
designate under the Plan. and any claim for such benefits shall be considered
and reviewed under the procedures set out in the Plan.
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(c) Company may make payment of benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the Plan. Company
shall notify Trustee of its decision to make payment of benefits directly prior
to the time amounts are payable to Plan participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments in accordance with the terms of the Plan. Trustee
shall make payments in accordance with subparagraph (a) of this Section, and
Company shall make the balance of each payment as it falls due. Trustee shall
notify Company where principal and earnings are not sufficient. To the extent of
available Trust assets, and if so requested by the Committee at any time,
Trustee shall reimburse Company out of Trust assets for any Plan benefits
previously paid under the terms of the Plan directly by Company and not
previously reimbursed by Trustee, provided that after a Change of Control no
such reimbursement shall be made for any benefits paid by Company prior to the
Change of Control.
Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When
Company is Insolvent.
(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if Company is Insolvent. Company shall be considered "Insolvent"
for purposes of this Trust Agreement if (i) Company is unable to pay its debts
as they become due, or (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section I (d) hereof. the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.
(1) The Board of Directors and the Chief Executive Officer of
Company shall have the duty to inform Trustee in writing of Company's
Insolvency. If a person claiming to be a creditor of Company alleges in writing
to Trustee that Company has become Insolvent, Trustee shall determine whether
Company is Insolvent (in accordance with the procedure set forth in subsections
(2) and (3), below) and, pending such determination, Trustee shall discontinue
payment of benefits to Plan participants or their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency, or
has received notice from Company or a person claiming to be a creditor alleging
that Company is Insolvent, Trustee shall have not duty to inquire whether
Company is Insolvent. Trustee may in all events rely on such evidence concerning
Company's solvency as may be furnished to Trustee and which provides Trustee
with a reasonable basis for making a determination concerning Company's
solvency.
(3) If at any time Trustee has determined that Company is Insolvent,
Trustee shall discontinue payments to Plan participants or their Beneficiaries
and shall hold the assets of the Trust for the benefit of Company's general
creditors. Nothing in this Trust Agreement shall in any way diminish any rights
as general creditors of the Company with respect to benefits of Plan
participants or their beneficiaries to pursue their rights due under the Plan or
otherwise.
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(4) Upon receipt of notice of Company's Insolvency from any person,
other than the Board of Directors and the Chief Executive Officer, Trustee shall
seek in writing a determination of the Board of Directors and Chief Executive
Officer or any appropriate court as to the Insolvency of Company. Trustee may
conclusively rely upon a determination of the Board of Directors and Chief
Executive Officer as to Company's Insolvency.
(5) Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 hereof only
after Trustee has determined in accordance with subsection (b)(2) hereof that
Company is not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan for the period
of such discontinuance, less the aggregate amount of any payments made to Plan
participants or their beneficiaries by Company in lieu of the payments provided
for hereunder during any such period of discontinuance.
Section 4. Payments to Company.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Company shall have no right or power to direct Trustee to return to
Company or to divert to others any of the Trust assets before all payment of
benefits have been made to Plan participants and their beneficiaries pursuant to
the terms of the Plan.
Section 5. Investment Authority.
(a) The Trustee shall have the following powers and authority in the
administration of the Trust Fund to be exercised as provided in Section 8
hereof;
(1) All rights associated with assets of the Trust shall be
exercised by Trustee or Company and shall in no event be exercisable by or rest
with Plan participants;
(2) To retain any investment and property which may be received by
it for such length of time as may seem proper, without liability by reason of
such retention;
(3) To invest and reinvest all or any part of the Trust assets in
any common or preferred stocks, shares of investment trusts and investment
companies, bonds, debentures, mortgages, deeds of trust, mortgage
participations, notes, real estate or other property which the Committee, in its
discretion, may select; provided that the Trustee may not invest in its own
stock or securities or in stock or securities issued by a parent or affiliate
company of the Trustee; and further provided that the Trustee may not invest in
securities (including stock or rights to acquire stock) or obligations issued by
Company, other than a de minimis amount held in common investment vehicles in
which Trustee invests). Any such investments may be held in bearer form, or in
the name of the Trustee, or in the name of a nominee or nominees:
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(4) To retain cash or the proceeds from the sale of any assets until
such time or times as it receives direction from Company regarding the
appropriate investments of such funds;
(5) To hold uninvested cash awaiting investment or distribution, and
such additional cash balances as it shall deem reasonable or necessary, without
incurring any liability for the payment of interest thereon;
(6) Which respect to any securities forming part of the Trust
created hereunder, to exercise all voting rights, either in person or by proxy,
as directed by the Committee; to exercise conversation, subscription, option and
similar rights: to enter or refuse to enter into any dissolution, liquidation,
consolidation, recapitalization, reorganization, merger or other change in
capital structure, and in connection therewith, to make exchanges of securities
and to enter into agreements on such terms and conditions as it may deem
advisable; and to enter into voting trusts and agreements with other
stockholders, and other holders of securities, and the corporations which shall
have issued such stocks or securities, any one or more of such persons, for such
purposes and for such period of time (whether or not the same extends beyond the
actual or probable duration of the trusts created hereunder), and upon such
terms and conditions as it shall deem advisable;
(7) To enter into any lease or leases, without application to any
court of any or all real or personal property held hereunder, for such period
(whether or not the same expires prior to or extends beyond the actual or
probable duration of the trusts created hereunder), and upon such terms and
conditions as it shall deem advisable;
(8) To borrow money or property, either upon the security of any or
all of the assets of the trusts created hereunder, or without security or
otherwise, upon such terms and conditions and for such purposes in connection
with the administration of the trusts as it shall deem proper;
(9) To grant, bargain, sell, exchange, mortgage, grant options to
buy, or otherwise dispose of any or all personal property, at any time held
hereunder, either at public or private sale, for cash or on credit, or partly
for cash and partly on credit, upon such terms and conditions, in such manner
and for such purposes, and either in whole or in part, as it may deem proper:
and to make, execute, acknowledge and deliver good and sufficient instruments
for that purpose. No purchaser, upon any sale or either disposition, shall be
bound to see to the application of the moneys or property arising therefrom or
to inquire into the validity, expediency or propriety of any such sale or
disposition;
(10) to adjust, compromise or arbitrate claims or demands of, or,
against. the Trust created hereunder, whether such claims are due or shall
become due in the future, including without limitation any overpayment or refund
claim, or any deficiency, additional assessment or other liability, relating to
any federal, state, county, municipal or other tax, irrespective of the nature
thereof;
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(11) In any case where the applicable law is unclear or uncertain,
to allocate to income or to principal, or to apportion between income and
principal, receipts disbursements, depletion and depreciation in such manner as
it shall deem proper;
(12) To execute and deliver all documents, contracts, and
instruments necessary or advisable in connection with the administration of the
Trust created hereunder:
(13) To invest in any investment company for which Trustee or any
affiliate of Trustee receives a fee for investment, advisory, custodial services
or other services Trustee is permitted to perform for said investment company
and which said fee is in addition to the fees payable hereunder; and
(14) Notwithstanding anything in this Section to the contrary, if
the authority to direct Trustee as to the investment of all or any part of the
assets held in the Trust has been granted to the Plan participants, Trustee
shall not have any obligation to investigate the prudence of any such
investments and shall be indemnified and held harmless by Company for any act or
failure to act made pursuant to such direction.
Section 6. Disposition of Income.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
Section 7. Accounting By Trustee.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within sixty (60) days after the removal or resignation of
Trustee, Trustee shall deliver to Company a written account of its
administration of the Trust during such year or during the period from the close
of the last preceding year to the date of such removal or resignation setting
forth all investments, receipts, disbursements and other transactions effected
by it, including a description of all securities and investments purchased and
sold with the cost or net proceeds of such purchases or sales (accrued) interest
paid or receivable being shown separately) and showing all cash, securities and
other property held in the Trust at the resignation as the case may be.
(a) If objections to specific items in such account are filed with Trustee
within ninety (90) days after the account has been furnished and Trustee
believes such objections to be valid, Trustee shall adjust the account in such
manner as it deems equitable under the circumstances.
(b) Trustee shall then give written notice to the Committee of the
adjustment of the account and if no objection to specific items in such account,
as adjusted, are filed with Trustee within ninety (90) days after notice of such
adjustment has been furnished, then, the account of Trustee with respect to all
matters contained therein (as originally furnished, if no adjustment was made,
or as adjusted, if an adjustment was made), shall be deemed to have been
approved and Trustee shall to the extent permitted by applicable law, be
relieved and discharged of and
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from all liability to anyone with respect to its acts or failures to act which
are reasonably capable of identification by means of such account during the
period covered thereby. Notwithstanding anything in the foregoing to the
contrary, this Section 7 shall not operate to relieve or discharge the Trustee
from liability for any act or failure to act that involves gross negligence,
willful misconduct or fraud.
Section 8. Responsibility of Trustee.
(a) Trustee shall act in a manner that, under the circumstances then
prevailing (specifically including, but not limited to, the general economic
conditions and the anticipated needs of the Plan participants and
beneficiaries), persons of skill, prudence, and diligence, acting in a similar
capacity and familiar with those matters would use in the conduct of an
enterprise of similar character and similar aims, to attain Company's goals
under this Trust Agreement; provided, however, that Trustee shall incur no
liability to any person and shall be indemnified and held harmless for any
action taken pursuant to a direction, request or approval given by Company or
the Committee which is in conformity with the terms of this Trust Agreement and
is given in writing by Company or the Committee, except to the extent such
liability is due to the Trustee's negligence or noncompliance with the terms of
this Trust Agreement or with ERISA. Regardless of liability, Trustee shall
notify the committee if it knows of any violation of applicable law in
connection with this Trust Agreement, or discovers a mistake in the
administration of the Trust. In the event of a dispute between Company and third
party, Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
(b) If Trustee undertakes to defends any litigation arising in connection with
this Trust, company agrees to indemnify Trustee on a current basis against
Trustee's costs, expenses and liabilities (including, without limitation,
attorney's fees and expenses) relating thereto and to be primarily liable for
such payments. If Company does not pay such costs, expenses and liabilities
within sixty (60) days of presentation, Trustee may obtain payment from the
Trust. Trustee shall be under no obligation to take or defend any legal action
of whatever nature unless it is first indemnified against expenses by Company or
to the shall be sufficient property in the Trust to indemnify Trustee with
respect to the expenses or losses to which it may be subjected.
(c) Trustee may consult with legal counsel (who may also be counsel for
Company generally) with respect to any of its duties or obligations hereunder.
(d) Trustee, may hire agents, accountants, actuaries, investment advisors.
financial consultants, counsel, or other professionals to assist it in
performing any of its duties or obligations hereunder and to pay their
reasonable expenses from the Trust.
(e) Trustee shall have, without exclusion, all powers conferred on Trustee
by applicable law, unless expressly provided otherwise herein, provided,
however, that if any insurance policy is held as an asset of the Trust, Trustee
shall have no power to name a beneficiary of the policy other than the Trust, to
assign the policy (as distinct from conversion of the policy to a different
form) other than to a successor trustee, or to loan to any person the proceeds
of any borrowing against such policy.
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(f) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or pursuant to applicable law, Trustee shall not have any power that
could give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the Code.
(g) Trustee shall not be liable for making or withholding any payments as
may be required by a court order.
(h) To do all acts, whether or not expressly authorized herein, which the
Trustee may deem necessary or desirable for the protection of the Trust Fund.
Section 9. Responsibility of Committee.
(a) Until a Change of Control has occurred, this Section 9(a) shall be
effective and the Committee shall direct the Trustee as to the administration of
the Trust in accordance with the following provisions:
(1) The Committee shall be identified to the Trustee by a copy of
the resolution or resolutions adopted by the Board appointing the Committee. In
the absence of any such appointment, the Board shall be the Committee. Persons
authorized to give directions to the Trustee of behalf of the committee shall be
identified to the Trustee by written notice from the Committee, and such notice
shall contain specimens of the authorized signatures. The Trustee shall be
entitled to rely on such written notice as evidence of the identity and
authority of the persons appointed until a written cancellation of the
appointment, or the written appointment of a successor, is received by the
Trustee.
(2) Directions by the committee, or its delegate, to the Trustee
shall be in writing and signed by the Committee or persons authorized by the
Committee, or may be made by such other method as is acceptable to the Trustee.
(3) The Trustee may conclusively rely upon directions from the
committee in taking any action with respect to this Trust Agreement, including
the making of payments from the Trust and the investment of the trust assets
pursuant to this Trust Agreement. The Trustee shall have no liability for
actions taken, or for failure to act, on the direction of the committee, except
to the extent such liability is due to Trustee's own negligence or its
noncompliance with terms of this Trust Agreement or applicable law. Where the
Trustee is required to act on the direction of the committee, the Trustee shall
have no liability for failure to act in the absence of proper written
directions.
(4) With respect to actions the Trustee is required to take subject
to the instructions of the committee, the Trustee shall request instructions
from the committee in writing and upon such request shall have no duty to act or
shall have no liability for the failure to act if such instructions are not
forthcoming from the Committee. If requested instructions are not received
within a reasonable time, the Trustee may, but is under o duty to, act on its
own discretion to carry out the provisions of this Trust Agreement and the Plan.
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Section 10. Compensation and Expenses of Trustee.
Trustee shall receive reasonable compensation for its services in
accordance with its schedule of compensation, as set forth in Exhibit 2 attached
hereto. The schedule may be amended from time to time in any manner that is
agreed upon between Trustee and Company. If after a Change of Control, Trustee
and Company fail to agree upon a compensation schedule, Trustee shall be
entitled to compensation of a rate equal to the rate charged by Trustee for
similar services rendered by it for other trusts similar to the Trust. Company
shall pay all administrative and Trustee's fees and expenses, including taxes
levied upon the Trust. If not so paid, the fees and expenses shall be paid from
the Trust.
Section 11. Resignation and Removal of Trustee.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective thirty (30) days after receipt of such notice unless Company
and Trustee agree otherwise.
(b) Trustee may be removed by Company on thirty (30) days notice or upon
shorter notice accepted by Trustee.
(c) Upon a Change of Control Trustee may not be removed by Company for
five (5) years.
(d) If Trustee resigns within five (5) years after a Change of Control,
Company shall apply to a court of competent jurisdiction for the appointment of
a successor trustee or for instructions.
(e) Upon resignation or removal of Trustee and appointment of a successor
trustee, all assets shall subsequently be transferred to the successor trustee.
The transfer shall be completed within sixty (60) days after receipt of notice
of resignation, removal or transfer, unless Company, in its sole discretion.
extends the time limit.
(f) If Trustee resigns or is removed and no successor trustee shall have
been appointed by the effective date of Trustee's resignation or removal,
Trustee may apply to a court of competent jurisdiction for appointment of a
successor or for instructions or may pay the assets of the Trust to Company. All
expenses of Trustee in connection with such proceeding shall be allowed as
administrative expenses of the Trust.
Section 12. Appointment of Successor.
(a) If Trustee resigns or is removed in accordance with Section I I (a) or
(b) hereof, Company may appoint any third party, such as a bank trust department
or other party that may be granted corporate trust powers under state law, as a
successor trustee. The appointment shall be effective when accepted in writing
by the new trustee, which shall have all of the rights and
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powers of the former Trustee, including ownership rights in the Trust assets.
The former Trustee shall execute any instruments necessary or reasonably
requested by Company or the successor trustee to evidence the transfer.
(b) The successor trustee need not examine the records and acts of any
prior trustee and may retain or dispose of existing Trust assets, subject to
Sections 7 and 8 hereof. The successor trustee shall not be responsible for, and
Company shall indemnify and defend the successor trustee from and against any
claim or liability resulting from any action or inaction of any prior trustee or
from any other past events or any condition existing at the time it becomes
successor trustee.
Section 13. Amendment or Termination.
(a) Subject to the prohibition set forth in subsection (e), below, this
Trust Agreement may be amended by a written instrument executed by Trustee and
Company. Notwithstanding the foregoing, no such amendment shall conflict with
the terms of the Plan or shall make the Trust revocable after it has become
irrevocable in accordance with Section 1(b) hereof
(b) Trustee is not a party to the Plan except insofar as Trustee has
assumed duties specifically provided in this Trust Agreement. Company retains,
in its sole discretion the right to amend any provisions of the Plan; provided,
however, that the allocation of responsibilities to Trustee shall not be
amended, altered or modified without the prior written consent of Trustee
(c) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan. Upon termination of the Trust any assets remaining in
the Trust shall be returned to Company.
(d) Upon written approval of all of the Plan participants or beneficiaries
then entitled to payment of benefits pursuant to the terms of the Plan, Company
may terminate this Trust prior tot he time all benefit payments under the Plan
have been made. All assets in the Trust at termination shall be returned to
Company.
(e) This Trust Agreement may not be amended by Company for five (5) years
following a Change of Control.
Section 14. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Notwithstanding any Qualified Domestic Relations Order, as that term
is defined in ERISA, and subject to any Internal Revenue Service levy, benefits
payable to Plan participants and their beneficiaries under this Trust Agreement
may not be anticipated, assigned (either at law or in equity), alienated,
pledged, encumbered or subjected to attachment, garnishment, levy, execution or
other legal or equitable process.
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(c) Except to the extent preempted by federal law, this Trust Agreement
shall be governed by and construed in accordance with the internal laws of the
State of New Jersey.
(d) For purposes of this Trust, Change of Control shall mean (i) the
purchase or other acquisition by any person, entity or group of persons, within
the meaning of section 1 3(d) or 14(d) of the Securities Exchange Act of 1934
("Act") or any comparable successor provisions, of beneficial ownership (within
the meaning of rule 13d-3 promulgated under the Act) of thirty (30) percent or
more of either the outstanding shares of common stock or the combined voting
power of Company's ten outstanding voting securities entitled to vote generally,
(ii) the approval by the stockholders of Company of a reorganization, merger or
consolidation the effect of which in each case, is that the persons who were
stockholders of Company immediately prior to such reorganization, merger or
consolidation will not, immediately thereafter, own more than fifty (50) percent
of combined voting power entitled to vote generally in the election of directors
of the reorganized, merged or consolidated company's then outstanding
securities, (iii) a liquidation or dissolution of Company or (iv) the sale of
all or substantially all of Company's assets to an unrelated third party.
(e) Any person dealing with Trustee may rely upon a copy of this Trust
Agreement and any amendments thereto certified to be true by Trustee.
(f) No notice given or representation made by Company to Trustee
pertaining to the provisions of this Trust Agreement or the Plan shall be
effective unless such notice is given or representation made in writing by the
Board of Directors or the Secretary of Company.
Section 15. Effective Date.
The effective date of this Trust Agreement shall be July 15, 1997.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be executive by their respective duly authorized officers and attested on the
date and year first above written.
Attest:
By:
Title:
Attest: SUMMIT BANK
By:
Title:
