Exhibit 10.3
TBC CORPORATION
TRUST AGREEMENT FOR
______________(date)
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TABLE OF CONTENTS
Page
ARTICLE I Name of Trust............................... 1
1.1 Name.................................. 1
1.2 Purpose............................... 1
ARTICLE II Definitions................................. 2
ARTICLE III Company Obligations......................... 3
ARTICLE IV Payment Schedules........................... 3
4.1 Payment Schedule...................... 3
4.2 Modified Payment Schedule............. 4
4.3 Withholdings.......................... 4
4.4 Further Assurances.................... 4
4.5 Distributions in the Event
of Taxability......................... 5
ARTICLE V The Trust Fund and Funding.................. 5
5.1 Receipt and Holding of
the Trust Funds....................... 5
5.2 Initial Funding of Trust.............. 5
5.3 Additional Funding; Excess Assets..... 6
5.4 Release of Trust Funds Unless
a Change of Control Occurs............ 6
5.5 Transfer to Another Trustee........... 6
5.6 Company's Right to Substitute Assets.. 7
ARTICLE VI Status of Trust............................. 7
6.1 Grantor Trust......................... 7
6.2 Subject to Claims Creditors
of the Company........................ 7
6.3 Notification of Bankruptcy
or Insolvency......................... 8
ARTICLE VII The Trustee's Accounting.................... 9
7.1 Books and Records..................... 9
7.2 Trustee's Report...................... 9
7.3 Additional Reports.................... 9
ARTICLE VIII Administration of the Trust Fund............ 10
8.1 Ownership and Investment
of the Trust Fund..................... 10
8.2 Powers of the Trustee................. 10
8.3 Situs of Assets....................... 13
8.4 Entire Agreement...................... 13
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ARTICLE IX Relating to the Trustee..................... 13
9.1 Liability of the Trustee.............. 13
9.2 Obligations under Law................. 14
9.3 Bond.................................. 14
9.4 Compensation.......................... 14
9.5 Indemnification....................... 14
ARTICLE X Missing Persons, Incapacitated Executives,
Death, Directions and Notices............... 15
10.1 Missing Persons....................... 15
10.2 Incapacity; Death..................... 15
10.3 Form.................................. 15
10.4 Proof of any Matter................... 15
10.5 Absence of Directions................. 15
ARTICLE XI Resignation or Removal of Trustee........... 15
11.1 Successor Trustee..................... 15
11.2 Final Account......................... 16
11.3 Transfer and Discharge................ 16
11.4 Effective Date of Appointment
of Successor Trustee.................. 16
11.5 Merger or Consolidation............... 16
ARTICLE XII Protection for Third Persons................ 16
ARTICLE XIII Termination; Amendment; and Waiver.......... 17
13.1 Termination........................... 17
13.2 Amendment and Waiver.................. 17
ARTICLE XIV General Provisions.......................... 17
14.1 Tennessee Trust....................... 17
14.2 Severability.......................... 17
14.3 Arbitration........................... 18
14.4 Notices............................... 18
14.5 Trust Beneficiaries................... 18
14.6 Headings.............................. 19
14.7 Counterparts.......................... 19
14.8 Nonalienation of Benefits............. 19
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TBC CORPORATION
TRUST AGREEMENT FOR __________
THIS AGREEMENT is established effective as of the ___ of ______,
____, by TBC CORPORATION (the "Company"), a Delaware corporation, as
grantor, and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, as trustee, under
the following circumstances:
(A) The Company has executed an Executive Employment
Agreement, dated ___________, ____, with________________("the
Executive"), which Agreement provides for the Company's employment
of the Executive, beginning _______, ____. The Executive
Employment Agreement contains provisions to pay the Executive
compensation and benefits if the Executive's employment with the
Company is terminated for certain reasons including, but not
limited to, a Change of Control as defined therein.
(B) Those compensation and benefit payments are not funded
or otherwise secured, and the Company desires by this Trust to
provide further assurance to the Executive that the provisions of
the Employment Agreement concerning termination of the Executive's
employment with the Company following a Change of Control of the
Company (as defined in Article II) will be satisfied and payments
will be timely made when due, by depositing assets for use in
making such payments, in trust, upon the occurrence of a Change of
Control or Potential Change of Control of the Company (as therein
defined), subject only to the claims of the Company's existing or
future general creditors in the event of the Company's insolvency
or bankruptcy as defined in Section 6.3.
NOW, THEREFORE, in consideration of the agreements contained
herein and for other good and valuable considerations, the parties hereto
agree as follows:
ARTICLE I
NAME OF TRUST
1.1 Name. The Trust created by this Agreement may be referred
to as the "TBC CORPORATION TRUST FOR _____________ ".
1.2 Purpose. The Trust is established for the purposes set
forth in Preamble B to this Agreement.
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ARTICLE II
DEFINITIONS
The following terms used in this Trust have the following
meanings:
"Board" means the Board of Directors of the Company.
"Change of Control" means any change in control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") as the same is construed by the Securities
and Exchange Commission on the date of execution of this Agreement or in
accordance with any change made with respect to said Item or construction
thereof deemed more favorable by the Executive; provided that, without
limitation, such a change in control shall be deemed to have occurred if
(i) any "person" (as such term is defined in Sections 13(d) and 14(d)(2)
of the Exchange Act), other than the Executive and/or an entity then
controlled by the Executive or the Company, is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing
30% or more of the combined voting power of the Company's then outstanding
securities; (ii) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board cease for any
reason to constitute at least a majority thereof unless the election, or
the nomination for election by the Company's stockholders, of each new
Director was approved by a vote of at least two-thirds of the Directors
then still in office who were Directors at the beginning of the period;
(iii) the Company merges or consolidates with another corporation and the
Company or an entity controlled by the Company or the Executive
immediately prior to the merger or consolidation is not the surviving
entity; or (iv) a sale, lease, exchange, or other disposition of all or
substantially all of the assets of the Company takes place.
"Code" means the Internal Revenue Code of 1986 and the
regulations issued thereunder, as amended from time to time hereafter.
"Company" means TBC CORPORATION, a Delaware corporation, and any
successor to such entity.
"Employment Agreement" means the Executive Employment Agreement,
dated ___________, ____, between the Company and the Executive, as the
same may be hereafter modified, amended, or extended by mutual agreement
of the Company and the Executive, and shall include any Employment
Agreement subsequently executed by the Company and the Executive which
supersedes or replaces such Executive Employment Agreement.
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"Executive" means _______________.
"Fiscal Year" means the fiscal year of the Company.
"Payment Schedule" has the meaning ascribed to it in Section 4.1.
"Potential Change of Control" means and shall be deemed to have
occurred if (i) the Company enters into an agreement, the consummation of
which would result in the occurrence of a Change of Control of the
Company, (ii) any person, other than the Company, the Executive or an
entity controlled by the Company or the Executive, publicly announces an
intention to take or to consider taking actions which, if consummated,
would constitute a Change of Control of the Company, (iii) any person,
other than the Executive and/or any entity controlled by the Executive or
the Company, increases his beneficial ownership of the combined voting
power of the Company's then outstanding securities by 5% or more over the
percentage so owned by such person on the date hereof and, after such
increase, is the beneficial owner, directly or indirectly, of securities
of the Company representing 20% or more of such securities; or (iv) the
Board adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change of Control of the Company has occurred.
"Trust" means the trust created by this Agreement.
"Trust Fund(s)" has the meaning ascribed to it in Section 5.1.
"Trustee" means any trustee from time to time serving as the
trustee of the Trust.
ARTICLE III
COMPANY OBLIGATIONS
The Company shall continue to be liable to make all payments to
the Executive required under the terms of the Employment Agreement to the
extent such payments have not been made pursuant to this Trust. Payments
made from Trust Funds to the Executive pursuant to Article IV shall, to
the extent of such payments, satisfy the Company's obligation to pay
benefits to the Executive under the Employment Agreement.
ARTICLE IV
PAYMENT SCHEDULES
4.1 Payment Schedule. Upon the occurrence of the termination of
Executive's employment with Company following any Change of Control or
Potential Change of Control, the Company
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shall deliver to the Trustee a payment schedule (the "Payment Schedule")
showing as to the Executive the dates payments are to be made to the
Executive and the amount of each such payment or setting forth a formula
or instructions acceptable to the Trustee for determining the amounts so
payable and the payment dates. The Payment Schedule shall also be
delivered by the Company to the Executive.
4.2 Modified Payment Schedules. A Modified Payment Schedule
shall be delivered by the Company to the Trustee and to the Executive each
time that additional amounts are required to be paid by the Company to the
Trustee under Section 5.3, upon the occurrence of any event requiring a
new Payment Schedule under Section 4.1., or upon the death of the
Executive. The Trustee shall make payments from the Trust Funds to the
Executive in accordance with the provisions of the applicable Payment
Schedule. In the event that the Executive reasonably believes that the
Payment Schedule, as modified, does not properly reflect the amount
payable to the Executive and/or dates of Payment under the Employment
Agreement, the Executive shall be entitled to deliver to the Trustee
written notice ("the Executive's Notice") setting forth payment
instructions for the amount the Executive believes is payable under the
relevant terms of the Agreement. The Executive shall also deliver a copy
of the Executive's Notice to the Company within three (3) business days of
delivery to the Trustee. Unless the Trustee receives written objection
from the Company within thirty (30) business days after receipt by the
Trustee of such notice, the Trustee shall make the payment in accordance
with the payment instructions set forth in the Executive's Notice.
4.3 Withholdings. The Trustee shall be permitted to withhold
from any payment due to the Executive hereunder the amount required by law
to be so withheld under Federal, state and local wage withholdings
requirements or otherwise, and shall pay over to the appropriate
government authority the amounts so withheld. The Trustee may rely on
instructions from the Company (consistent with the Executive's
instructions to the Company) as to any required withholding and shall be
fully protected under Section 9.5 in relying on such instructions.
4.4 Further Assurances. The Trustee shall, at any time and from
time to time, administer this Trust as may be necessary or proper to
effectuate the purposes of this Trust. If the Trust receives an
unqualified opinion of tax counsel selected by the Trustee, which opinion
states that the Executive is subject to Federal income tax on amounts held
in Trust prior to the distribution to the Executive of such amounts, the
Trustee shall, to the extent practicable, take such action and administer
the Trust Fund in such a manner so as to prevent the Trust Fund from
becoming immediately taxable income to the Executive before making any
distributions pursuant to Section 4.5, provided that
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the Trustee shall not return any portion of the Trust Fund to the Company.
4.5 Distributions in the Event of Taxability. In the event of
any final determination by the Internal Revenue Service or a court of
competent jurisdiction, which determination is not appealable or the time
for appeal or protest of which has expired, or the receipt by the Trustee
of a substantially unqualified opinion of tax counsel selected by the
Trustee, which determination determines, or which opinion opines, that the
Executive is subject to Federal income taxation on amounts held in the
Trust prior to the distribution to the Executive of such amounts and no
curative action is available under Section 4.4, the Trustee shall, on
receipt by the Trustee of such opinion or notice of such determination,
pay to the Executive the portion of the Trust assets includable in the
Executive's Federal gross income; provided that, as a condition of
receiving such payment, the Executive has delivered to the Trustee a
written agreement stating that the payment being made is in satisfaction
of the obligations of the Company due to him in respect of which the
payment is made, after taking into consideration that such payment is
being made prior to the required distribution date, and the Company has
concurred in such agreement, which concurrence shall not be unreasonably
withheld.
ARTICLE V
THE TRUST FUND AND FUNDING
5.1 Receipt and Holding of the Trust Funds. The Trustee will
accept and hold all contributions, insurance contracts, insurance policies
and other property transferred and delivered to the Trustee by the Company
or at the Company's direction. All contributions and property received by
the Trustee, plus income and appreciation, constitute the trust fund (the
"Trust Fund(s)").
5.2 Initial Funding of Trust. Concurrently with the execution
of this Agreement, the Company is delivering to the Trustee the sum of One
Hundred Dollars to be held in trust hereunder. Upon the earlier of the
occurrence of any Change of Control or Potential Change of Control, the
Company shall contribute to the Trust, in cash or other property, the
amount determined under accepted actuarial principles to be necessary to
fund the amounts payable to the Executive under the Employment Agreement
in accordance with a Payment Schedule to be delivered to the Trustee
pursuant to Section 4.1, assuming that, for purposes of such Payment
Schedule, the Executive's employment with the Company had been terminated
on the day following the occurrence of the Change of Control or Potential
Change of Control.
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5.3 Additional Funding; Excess Assets. Unless the Trust Funds
have been released to the Company pursuant to Section 5.4, the Company
shall, as soon as practicable after the end of each Fiscal Year,
recalculate the amount determined under accepted actuarial principles to
be necessary to fund any amounts payable to the Executive under the
Employment Agreement, in accordance with any Payment Schedule delivered to
the Trustee pursuant to Sections 4.1 and 4.2 during the most recently
completed Fiscal Year (herein referred to as the "Aggregate Payment
Obligation"). If the Aggregate Payment Obligation exceeds the fair market
value of the Trust Funds at the end of the most recently completed Fiscal
Year, then there exists a funding deficiency to the extent of such excess;
and the Company shall contribute to the Trustee no later than 90 days
after the end of such Fiscal Year additional cash or property having a
fair market value equal to the amount of the funding deficiency. If the
fair market value of the Trust Funds at the end of the most recently
completed Fiscal Year is more than 125% of the Aggregate Payment
Obligation, then there is an overfunding to the extent of such excess; and
the Trustee shall as soon as practicable after the determination that an
overfunding exists distribute to the Company cash or other property having
a fair market value equal to the amount of the overfunding in excess of
such 125%.
5.4 Release of Trust Funds Unless Change of Control Occurs. Any
funds delivered to the Trustee pursuant to Section 5.2 because of the
occurrence of a Potential Change of Control, together with any assets in
the Trust Fund in excess of $100, shall be returned to the Company six
months after the date of such delivery, unless a Change of Control shall
have occurred or the Potential Change of Control has not been abandoned or
terminated. Each such initial six-month period shall be renewed for an
additional six-month period, if any Potential Change of Control occurs
during such initial six-month period. The Company shall notify the
Trustee of the occurrence of a Change of Control or Potential Change of
Control, and the Trustee may rely on such notice or on any other actual
notice satisfactory to the Trustee of such Change or Potential Change
which the Trustee may receive. Notwithstanding the foregoing, the Trustee
shall have no duty or obligation to make any independent determination
that such Change or Potential Change has occurred. In the event Trust
Funds are released to the Company pursuant to this Section 5.4, all
Payment Schedules delivered to the Trustee prior thereto pursuant to
Section 4.1 shall be returned to the Company and be of no further force or
effect.
5.5 Transfer to Another Trustee. Upon the Executive's prior
written consent, the Company may direct the Trustee to transfer the Trust
Fund to a successor trustee as set forth in Section 11.1. The Trustee
immediately will comply with that
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direction. When that transfer is completed, the Trustee will be relieved
from all further obligations in connection with the Trust Fund.
5.6 Company's Right to Substitute Assets. The Company shall
have the right at any time, and from time to time in its sole discretion,
to substitute assets of equal fair market value for any asset held by the
Trust. This right is exercisable by Company in a nonfiduciary capacity
without the approval or consent of any person in a fiduciary capacity,
including without limitation, the Trustee.
ARTICLE VI
STATUS OF TRUST
6.1 Grantor Trust. The Trust is part of the Company's program
established for the purpose of providing certain compensation and
retirement benefits to the Executive, and is intended to be exempt from
the participation, vesting, funding and fiduciary requirements of the
Employee Retirement Income Security Act of 1974, as amended. The Company
intends the Trust to be treated as a grantor trust within the meaning of
Section 671 of the Code and all income attributable to the Trust Fund
shall be reported by the Company. The Trust Fund shall at all times be
subject to the claims of the creditors of the Company as set forth in
Section 6.2.
6.2 Subject to Claims of Creditors of the Company. It is the
intent of the parties hereto that the Trust Fund is and shall remain at
all times subject to the claims of the creditors of the Company in the
event of the Company's insolvency or bankruptcy as set forth in this
Article VI, including, without limitation, its general creditors
(including the Executive). Accordingly, the Company shall not create a
security interest in the Trust Fund in favor of the Executive or any
creditor. If the Trustee receives the notice provided for in Section 6.3,
or otherwise receives actual notice that the Company is insolvent or
bankrupt as defined in Section 6.3, the Trustee will make no further
distributions of the Trust Fund to the Executive but shall deliver the
Trust Funds only as a court of competent jurisdiction, or duly appointed
receiver or other person authorized to act by such a court, may direct, in
order to make the Trust Fund available to satisfy the claims of the
Company's creditors, including, without limitation, its general creditors.
The Trustee shall resume distribution of the Trust Fund to the Executive
under the terms hereof after receipt of notification from the Company,
through its Board of Directors and Chief Executive Officer, that the
Company was not, or is no longer, bankrupt or insolvent, or upon receipt
of a decision to that effect by a court of competent jurisdiction or a
duly appointed receiver or other person authorized by a court to so act.
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Unless the Trustee has actual notice of the Company's bankruptcy or
insolvency, the Trustee shall have no duty to inquire whether the Company
is bankrupt or insolvent.
6.3 Notification of Bankruptcy or Insolvency. The Company,
through its Board of Directors and Chief Executive Officer, shall advise
the Trustee promptly in writing of the Company's bankruptcy or insolvency.
The Company shall be deemed to be bankrupt or insolvent upon the
occurrence of any of the following:
(i) The Company shall make an assignment for the
benefit of creditors, file a petition in bankruptcy,
petition or apply to any tribunal for the appointment of a
custodian, receiver, liquidator, sequestrator, or any
trustee for it or a substantial part of its assets, or shall
commence any case under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or
liquidation law or statute of any jurisdiction (federal or
state), whether now or hereafter in effect; or if there
shall have been filed any such petition or application, or
any such case shall have been commenced against it, in which
an order for relief is entered or which remains undismissed;
or the Company by any act or omission shall indicate its
consent to, approval of or acquiescence in any such
petition, application or case or order for relief or to the
appointment of a custodian, receiver or any trustee for it
or any substantial part of its property, or shall suffer any
such custodianship, receivership, or trusteeship to continue
undischarged; or
(ii) The Company shall generally not pay its debts as
such debts become due or shall cease to pay its debts in the
ordinary course of business; or
(iii) The sum of the Company's debts is greater than all
its property at a fair valuation; or
(iv) The present salable value of the Company's assets
is less than the amount that would be required to pay the
probable liability on its existing debts as they become
absolute, matured, due and payable.
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ARTICLE VII
THE TRUSTEE'S ACCOUNTING
7.1 Books and Records. The Trustee will keep accurate and
detailed accounts of all investments, receipts, disbursements and other
transactions in respect of the Trust Fund. Those accounts and related
records may be inspected by any person designated by the Company. The
Trustee will retain those records and supporting data for the period
required by law. All Trust assets may be commingled for purposes of
investment. For recordkeeping purposes only, an account will be
maintained for the Executive. The account will be credited with all
contributions relating to the Executive and will be debited with all
payments to the Executive.
7.2 Trustee's Report. Within 60 days after the end of each
Fiscal Year, the Trustee shall file a written report with the Company
containing:
(a) A description of investments, receipts, disbursements
and other transactions effected by the Trustee during the most
recently completed Fiscal Year;
(b) An exact description of any asset transferred to the
Trustee or transferred by the Trustee to any other person during
such Fiscal Year;
(c) An exact description of assets sold or purchased by the
Trustee during such Fiscal Year, the cost of each item purchased
and the net proceeds of each item sold;
(d) An exact description of all assets held by the Trustee
as of the close of business on the last day of such Fiscal Year,
and the cost and fair market value of each item (other than
insurance contracts) determined as of the same date; and
(e) Any other information required by law to be filed on
behalf of the Trust.
The information described in subsections (a), (b) and (c), above,
may be given in the form of monthly or quarterly reports, if those
reports, taken together, contain the required information.
7.3 Additional Reports. In addition to the report required
under Section 7.2 above, the Trustee shall make any interim reports
reasonably requested by the Company.
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ARTICLE VIII
ADMINISTRATION OF THE TRUST FUND
8.1 Ownership and Investment of the Trust Fund. The Trustee is
the legal owner of all Trust Fund assets and, subject to this Article,
shall invest and reinvest the Trust Fund. Any amounts reasonably
necessary to meet contemplated payments or to be transferred from the
Trust Fund may be deposited temporarily in the commercial department of
any bank or trust company. The Trustee will not be liable for any
interest on those deposits except for interest actually paid by the bank
or trust company or, if the deposit is with the Trustee's own commercial
department, interest at the legally permitted rate agreed to by the
Trustee and the Company. Alternatively, the Trustee may make temporary
deposits in governmental obligations, certificates of deposit, commercial
paper, commercial paper master notes, cash management funds, or a common
trust fund or a cash management fund maintained by the Trustee for
temporary cash investments.
8.2 Powers of the Trustee. Subject to this Article, Article V
and Sections 9.1 and 9.2 and in addition to the powers generally given to
trustees by law, the Trustee may:
(a) Invest and reinvest the Trust Fund in securities or other
property, real or personal, wherever located, and whether or not
productive of income, which the Trustee believes advisable, including
capital, common and preferred shares of stock (including, if directed
by the Company, investment of up to 10% of the Trust Funds in shares
of stock and other securities issued by the Company, the Trustee or
any entity related through common ownership to the Trustee), personal,
corporation and governmental obligations, whether or not secured;
mortgages, leaseholds, fees and other interests in realty; oil, gas or
mineral properties, rights, royalties, payments or other interests in
that property; contracts, conditional sale agreements, choses in
action; trust and participation certificates, or other evidences of
ownership, part ownership, interest or part interest. Except as
provided in Section 8.2, the Trustee will not be limited or restricted
by any statute or rule of law, now or hereafter in effect, governing
trust investments, and may invest and reinvest through the medium of
any combined, common, collective or commingled trust fund or funds
maintained by the Trustee or any entity related through common
ownership with the Trustee, the terms of which are incorporated into
this Trust, or commingle and invest the Trust Fund with other trust
funds created by the Company under other trusts. An investment will
not be improper or imprudent merely because the Trustee participated
in the issuance,
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underwriting or original sale of the acquired property or because the
proceeds were to be used to satisfy obligations of the issuer or
seller to the Trustee.
(b) Form or acquire an interest in a corporation or make use of
a corporation for the purpose of investing in and holding title to any
property.
(c) Except as limited by Section 8.2, hold property in the form
received (including shares of stock and other securities issued by the
Company, the Trustee or any entity related through common ownership to
the Trustee) for as long as the Trustee believes advisable, regardless
of the character of that property, and regardless of whether its
acquisition by a trustee is authorized by law.
(d) Sell or contract to sell, exchange or otherwise dispose of
or grant options on any asset of the Trust Funds, at public auction,
by private contract, pursuant to option, or otherwise, upon terms and
conditions which at the time the Trustee believes appropriate, and
make, execute and deliver instruments necessary or proper to complete
the transaction.
(e) Hold in its own or in nominee name any asset of the Trust
Funds.
(f) Exercise or sell, for adequate consideration, conversion or
subscription rights under any Trust Fund asset, and use that portion
of the Trust Funds necessary to exercise those rights.
(g) Vote or refrain from voting all shares of stock or
securities (including, at the direction of the investment committee
established under the Company's Retirement Plan, shares of stock and
other securities issued by the Company, the Trustee or any entity
related through common ownership to the Trustee) in person or by proxy
(including special, limited or general proxies, with or without power
of substitution) and, as stock or security holder, execute and deliver
proxies to one or more nominees. The Trustee may dissent from or
consent to, approve, authorize, and become a party to any
reorganization, consolidation, merger, sale or lease of corporate
property or other corporate readjustment, including dissolution or
liquidation, and execute appropriate instruments. In participating in
any corporate action, the Trustee may act as if it is the absolute
owner of the shares of stock or securities and may deposit those
certificates of ownership with any committee or depository designated
in the plan or
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agreement governing that corporate action, and pay from the Trust Fund
any charges or assessments imposed by that plan or agreement and may
accept and continue to hold any property received by reason of
participation in that corporate action.
(h) Borrow money for Trust purposes in amounts, from any person
(except itself) and on the terms and conditions which the Trustee
deems advisable. The Trustee will issue its promissory note as
Trustee and secure repayment by mortgaging, pledging or otherwise
hypothecating all or any part of the Trust Funds (including, if
directed by the Company, shares of stock and other securities issued
by the Company or any entity related through common ownership to the
Trustee).
(i) Establish whether any trust asset is to be treated as
principal or income and charge or apportion expenses, taxes and losses
to principal or income, as the Trustee believes appropriate. However,
gains or profits arising from the sale or other disposition of assets
will become a part of principal, and the Trustee will not be required
to set aside any part of income to absorb or make good any losses
arising from the disposition of any asset. Moreover, all liquidating
payments or liquidating dividends will become part of principal and
stock dividends will be allocated to principal or income depending on
the type of distribution represented by the dividend; regular or
ordinary cash dividends always will be treated as income. Also, the
Trustee need not amortize any premium paid to acquire property or to
set aside any part of the income to absorb a premium; if the Trustee
acquires any investment at a discount or at a price less than par
value, it need not treat or accrue that discount as income.
(j) Modify the terms of any obligation forming part of the Trust
Funds, and release any security for or guaranty of any obligation;
foreclose any mortgage securing any obligation, and purchase the
mortgaged property at the foreclosure sale, or acquire the property by
deed, conveyance or assignment from the mortgagor without foreclosure,
and retain property bought in under foreclosure or acquired without
foreclosure and dispose of it on the terms and conditions which the
Trustee believes appropriate.
(k) Abandon, adjust, arbitrate, compromise, or otherwise settle
any obligation or liability due to or from it as Trustee, including
any tax claim, and/or enforce or contest any claim in legal or
administrative
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proceedings. The Trustee will not be required to contest any claim
unless it has been indemnified against the costs and expenses of that
action or unless available Trust Fund assets are sufficient to pay
those expenses.
(l) Hire and compensate, from the Trust Funds, agents,
accountants, brokers and counsel (who may be counsel for the Company)
and other assistants and advisors which it believes are necessary or
desirable for the proper administration of the Trust Fund.
(m) Temporarily deposit uninvested funds in a commingled
temporary deposit medium which is composed of certificates of deposit
or other obligations issued by the Trustee, or a cash management fund
maintained by the Trustee.
(n) Do all other acts, not specifically mentioned above which
are necessary to administer the Trust Fund and to carry out the
purposes of the Trust.
8.3 Situs of Assets. Except as permitted by law, the Trustee
may not maintain in the Trust Fund any assets located outside the
jurisdiction of the district courts of the United States.
8.4 Entire Agreement. The Trustee will have only those powers,
duties, or responsibilities set forth in this Agreement.
ARTICLE IX
RELATING TO THE TRUSTEE
9.1 Liability of the Trustee. The Trustee will exercise its
powers and perform its duties with the care, skill, prudence, and
diligence under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with those matters would use in the
conduct of an enterprise of a like character and with like aim. The
Trustee also will diversify Trust Fund investments to minimize the risk of
large loss unless under the circumstances the Trustee believes it clearly
would be prudent not to diversify. Wherever this Trust Agreement provides
that the Trustee must follow directions of the Company or that the Trustee
has no duty or power concerning a matter, the Trustee will not be liable
for any harm caused by a direction or lack of a direction or by any
exercise or non-exercise of power by another unless:
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(a) the Trustee knowingly participates in or knowingly
undertakes to conceal an act or omission of another fiduciary with
respect to the Trust; or
(b) by the Trustee's failure to act in accordance with this
Section, the Trustee has enabled another fiduciary to breach a
fiduciary duty; or
(c) the Trustee has knowledge of a breach of fiduciary duty
which resulted in harm or injury and does not make reasonable efforts
under the circumstances to remedy the breach.
9.2 Obligations under Law. Regardless of any general or
specific power or authority granted to it, the Trustee may not engage in
any transaction, exercise any power or perform any duty under this Trust
in violation of the Code, the Employee Retirement Income Security Act, as
amended, or any regulations or rulings issued under those laws.
9.3 Bond. Unless required by law, the Trustee is not required
to furnish bond for the faithful performance of its duties.
9.4 Compensation. The Trustee will be compensated reasonably as
agreed to by the Company and the Trustee. Such compensation and all
reasonable expenses of administration will be paid by the Company either
directly or by otherwise providing the needed funds to the Trustee.
Failing such payment, the Trustee's compensation and all reasonable
expenses of administration will be paid by the Trustee out of the Trust
Funds.
9.5 Indemnification. The Company agrees to indemnify and hold
harmless the Trustee from and against any and all damages, losses, claims
or expenses as incurred, including expenses of investigation and fees and
disbursements of counsel to the Trustee and any taxes imposed on the Trust
Fund or income of the Trust (the "Indemnified Amounts"), arising out of or
in connection with the performance by the Trustee of its duties hereunder
provided the Indemnified Amounts do not arise out of, or are connected
with, any of the foregoing as to which the Trustee may be liable under
subparagraphs (a), (b) or (c) of Section 9.1. Any amount payable to the
Trustee under this Section 9.5 and not previously paid by the Company
shall be paid by the Company promptly upon demand therefor by the Trustee
or, if the Trustee so chooses in its sole discretion, from the Trust Fund.
In the event that payment is made hereunder to the Trustee from the Trust
Fund, the Trustee shall promptly notify the Company in writing of the
amount of such payment. The Company agrees that, upon receipt of such
notice, it will deliver to the Trustee to be held in the Trust an amount
in cash or other
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property equal to any payments made from the Trust Fund to the Trustee
pursuant to this Section 9.5. The failure of the Company to transfer any
such amount shall not in any way impair the Trustee's right to
indemnification pursuant to this Section 9.5.
ARTICLE X
MISSING PERSONS, INCAPACITATED EXECUTIVES,
DEATH, DIRECTIONS, AND NOTICES
10.1 Missing Persons. If any payment to be made by the Trustee
to the Executive is not claimed or accepted by the Executive, the Trustee
shall notify the Company. The Trustee shall not have any obligation to
search for or ascertain the whereabouts of the Executive.
10.2 Incapacity; Death. While the Executive is under a legal
disability or, in the Trustee's opinion, in any way is incapacitated so as
to be unable to manage his financial affairs, the Trustee may make any
required distribution to the Executive by making it (i) directly to the
Executive, (ii) to a legal guardian of the Executive, or (iii) in such
other manner as the Trustee deems in the best interest of the Executive.
Upon the death of the Executive, the Trustee shall make any required
distribution to the person or entity entitled to receive such amounts
pursuant to the terms of the Employment Agreement.
10.3 Form. All directions, notices, certifications and
amendments to the Trust to be given by the Company will be in writing
signed on behalf of the Company.
10.4 Proof of any Matter. If required by the Trustee, any
matter may be proved conclusively by certification by the Company. The
Trustee also may accept or require any other or further evidence it
believes to be sufficient or necessary.
10.5 Absence of Directions. If the Trustee believes that it
must take action under this Trust, it may act in its sole discretion
unless direction is provided in this Trust.
ARTICLE XI
RESIGNATION OR REMOVAL OF TRUSTEE
11.1 Successor Trustee. The Trustee may resign and be
discharged from its duties hereunder at any time by giving notice in
writing of such resignation to the Company and the Executive specifying a
date (not less than thirty (30) days after the giving of such notice) when
such resignation shall take effect. Promptly after such notice, the
Company shall appoint a successor trustee to which the Executive has no
reasonable objection, such trustee to become Trustee hereunder upon the
resignation date
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specified in such notice. The Trustee shall continue to serve until its
successor accepts the trust and receives delivery of the Trust Fund. The
Company may at any time substitute a new trustee by giving thirty (30)
days notice thereof to the Trustee then acting. The Trustee and any
successor thereto appointed hereunder shall be a commercial bank which is
not an affiliate of the Company, but which is a national banking
association or established under the laws of one of the states of the
United States, and which has equity in excess of $50,000,000.
11.2 Final Account. If the Trustee resigns or is removed, and
unless the Company accepts without exception the Trustee's final account,
the Trustee (or its representative) may settle its account either (a) by
beginning an action to procure a judicial settlement or (b) by agreeing on
a settlement with the Company.
11.3 Transfer and Discharge. If a successor trustee is
appointed, the Trustee will transfer the Trust Fund to the successor along
with true copies of all relevant records reasonably requested by the
successor. The Trustee also will
execute all documents necessary to the transfer of the Trust Fund. When
it has completed those actions, the Trustee will not be further
accountable for any matters covered in its accounting.
11.4 Effective Date of Appointment of Successor Trustee.
Appointment of a successor trustee will be effective when it delivers to
the Company and to the former trustee written acceptance of the
appointment. When delivered, this Trust will be interpreted as if the
successor trustee had been originally named Trustee. However, the
successor trustee will not be liable or responsible for anything done or
omitted in the administration of the Trust before its appointment.
11.5 Merger or Consolidation. If the Trustee engages in a
corporate reorganization, the resulting corporation automatically will be
the Trustee's successor.
ARTICLE XII
PROTECTION FOR THIRD PERSONS
Protection for Third Persons. In dealing with the Trustee, no
one other than the Company is required to inquire into the Trustee's
authority to take any action authorized by this Trust. All persons may
assume that the Trustee is authorized to take any action which it
undertakes and will not be liable for any act done under written direction
of the Trustee. Also, all persons may assume that the Trustee is
authorized to receive any money or property paid to the Trustee, or paid
under the Trustee's written direction. Written certification by the
Company of the Trustee's name will be conclusive evidence that
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the Trustee is qualified to act as Trustee at the date of that
certification.
ARTICLE XIII
TERMINATION; AMENDMENT; AND WAIVER
13.1 Termination. This Trust shall be terminated upon the
earlier of (i) the exhaustion of the Trust Fund; or (ii) the final payment
of all amounts payable to the Executive pursuant to
Sections 8 and 9 of the Agreement; (iii) the date the Executive ceases to
be employed by the Company for any reason, provided that no Trust Funds
unrelated to the $100 initial deposit made by the Company are then held by
the Trust and that no event has occurred prior to such date or is then
occurring which would, pursuant to Section 5.2 hereof, require the Company
to fund the Trust beyond the Company's $100 initial deposit; or (iv) upon
the mutual consent of the Company and the Executive. Promptly upon
termination of this Trust, any remaining portion of the Trust Funds shall
be paid to the Company.
13.2 Amendment and Waiver. This Trust is irrevocable and may
not be amended except by an instrument in writing signed on behalf of the
parties hereto together with the written consent of the Executive. The
parties hereto, together with the consent of the Executive, may at any
time waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto and the Executive to
any such waiver shall be valid if set forth in an instrument in writing
signed by or on behalf of such party and the Executive. Notwithstanding
the foregoing, any such amendment or waiver may be made by written
agreement of the parties hereto without obtaining the consent of the
Executive if such amendment or waiver does not adversely affect the rights
of the Executive hereunder. No amendment or waiver relating to this Trust
may be made which affects the Executive unless the Executive has agreed in
writing to such amendment or waiver.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Tennessee Trust. The Trust will be construed and enforced
according to the laws of the State of Tennessee and the United States.
14.2 Severability. In the event that any provision of this
Agreement or the application thereof to any person or circumstances shall
be determined by a court of proper jurisdiction to be invalid or
unenforceable to any extent, the remainder of this Agreement, or the
application of such provision to persons or circumstances other than those
as to which it is
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held invalid or unenforceable, shall not be affected thereby, and each
provision of this Agreement shall be valid and enforced to the fullest
extent permitted by law.
14.3 Arbitration. Any dispute between the Executive and the
Company or the Trustee as to the interpretation or application of the
provisions of this Trust and amounts payable hereunder shall be determined
exclusively by binding arbitration in Memphis, Tennessee, in accordance
with the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitration award in any court of competent
jurisdiction.
14.4 Notices. Any notice, report, demand or waiver required or
permitted hereunder shall be in writing and shall be given personally or
by prepaid registered or certified mail, return receipt requested (except
that reports may be sent by ordinary mail), addressed as follows:
If to the Company: TBC Corporation
0000 Xxxxxxx Xxxx Xxxxx
P. O. Xxx 00000
Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: Secretary
If to the Trustee: First Tennessee Bank National
Association
Personal Trust Division
P. O. Xxx 00
Xxxxxxx, Xxxxxxxxx 00000
If to the Executive: ___________________
At his then current home address as set
forth in the books and records of the party
giving such notice.
A notice shall be deemed received upon the date of delivery if
given personally or, if given by mail, upon the receipt thereof.
14.5 Trust Beneficiaries. The Executive is the intended
beneficiary under this Trust, and shall be entitled to enforce all terms
and provisions hereof with the same force and effect as if such person had
been a party hereto. Following the death of the Executive, his rights as
the intended beneficiary under this Trust may be exercised by the person
or entity which, pursuant to the terms of the Employment Agreement, would
be entitled to receive the amounts that would otherwise have been
distributed to the Executive hereunder.
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14.6 Headings. The headings and subheadings in this Agreement
are inserted for convenience of reference only and are not to be
considered in the construction of its provisions.
14.7 Counterparts. This Agreement may be executed in any number
of counterparts, each of which is an original; all counterparts constitute
the same instrument, sufficiently evidenced by any one counterpart.
14.8 Nonalienation of Benefits. The Executive's interest under
the Trust or right to receive any payment or distribution under the Trust
is not subject in any manner to sale, transfer, assignment, pledge,
attachment, garnishment or other alienation or encumbrance of any kind,
nor may such interest or right to receive a payment or distribution be
taken, voluntarily or involuntarily, for the satisfaction of the
obligations or debts of, or other claims against, the Executive or his
beneficiary, including claims for alimony, support, separate maintenance
and claims in bankruptcy proceedings.
IN WITNESS WHEREOF, the Company and the Trustee have caused this
instrument to be executed as of the 1st day of _____, ____.
FIRST TENNESSEE BANK
NATIONAL ASSOCIATION TBC CORPORATION
By___________________________ By_____________________________
Title: President and Chief Executive
Officer
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