TRUST AGREEMENT
FOR
XXXXXX SAVINGS AND LOAN ASSOCIATION, F.A.
EMPLOYEES' RETIREMENT AND SAVINGS PLAN
Fidelity Management Trust Company, its affiliates and employees may not
provide you with legal or tax advice in connection with the execution of
this document. It should be reviewed by your attorney and/or accountant
prior to execution.
CORPORATEplan for RETIREMENT
VOLUME SUBMITTER
PLAN DOCUMENT SYSTEMS
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; PURPOSE; RIGHTS OF
ELIGIBLE EMPLOYEES AND BENEFICIARIES
1.1 - Definitions
1.2 - Purpose
1.3 - Rights of Eligible Employees and Beneficiaries
ARTICLE II
POWERS AND DUTIES OF THE TRUSTEE
2.1 - Powers and Duties of Trustee
2.2 - Selection of Investment Funds
2.3 - Available Investment Funds
2.4 - Participant Direction
2.5 - Adjustment of Claims
2.6 - Voting Rights
2.7 - Participant Loans
2.8 - Registration of Securities; Nominees
2.9 - Agents, Attorneys, Actuaries, and Accountants
2.10 - Deposit of Funds
2.11 - Payment of Taxes; Indemnity
2.12 - Records and Statements
2.13 - Authority
2.14 - Court Action Not Required
2.15 - Reliance on Written Directions
2.16 - Trustee's Performance
2.17 - Counsel
2.18 - Annuity Contracts
2.19 - Sponsor Stock
ARTICLE III
PAYMENTS OUT OF THE TRUST
3.1 - Payments
3.2 - Compensation and Expenses
3.3 - Return of Contributions to the Sponsor
ARTICLE IV
SUCCESSION TO THE TRUSTEESHIP
4.1 - Resignation of the Trustee
4.2 - Removal of the Trustee
4.3 - Appointment of a Successor Trustee
(i)
ARTICLE V
AMENDMENT
5.1 - Right of Amendment
5.2 - Limitation on Amendment
ARTICLE VI
MISCELLANEOUS
6.1 - Validity of Trust Agreement
6.2 - No Guarantees
6.3 - Duty to Furnish Information
6.4 - Federal Income Tax Withholding
6.5 - Parties Bound
6.6 - Indemnification by Sponsor
6.7 - Bonding Requirements
6.8 - Separate Trust or Fund for Existing Plan Assets
(ii)
PREAMBLE
THIS Trust Agreement is entered into by and between Xxxxxx Savings and Loan
Association, F.A. (the "Sponsor") and Fidelity Management Trust Company, a
corporation organized and operating under the laws of the Commonwealth of
Massachusetts, and authorized to carry on a trust business (the "Trustee");
WHEREAS, the Sponsor has adopted the Xxxxxx Savings and Loan Association, F.A.
Employees' Retirement and Savings Plan (the "Plan") for the benefit of eligible
employees and their beneficiaries; and
WHEREAS, the Sponsor desires to establish a trust for the exclusive benefit of
eligible employees and their beneficiaries to hold assets of the Plan; and
WHEREAS, the Trustee agrees to act as trustee of said trust; and
WHEREAS, the Sponsor and any person designated by the Sponsor pursuant to
Article XVIII of the Plan, serves as a named fiduciary of the Plan for purposes
of Section 402(a)(2) of ERISA (the "Named Fiduciary");
NOW, THEREFORE, the parties agree that effective as of October 1, 1997, the
Trustee shall hold all funds and other property from time to time contributed or
transferred to it pursuant to the provisions of the Plan, together with all the
increments, proceeds, investments and reinvestments thereof, in trust, for the
uses and purposes and upon the terms and conditions hereinafter set forth.
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ARTICLE I
DEFINITIONS; PURPOSE; RIGHTS OF ELIGIBLE
EMPLOYEES AND BENEFICIARIES
1.1 - DEFINITIONS
For all purposes of this Trust Agreement, the terms defined in the Plan shall
have the meanings therein set forth, unless, as the case may be, a different
meaning is clearly required by the context hereof.
1.2 - PURPOSE
The Trust is established to provide retirement and other benefits for eligible
employees and their beneficiaries. Except as provided in Section 3.3, prior to
the satisfaction of all liabilities under the Plan, no part of the Trust assets
may be applied to any purpose other than providing benefits under the Plan and
for defraying expenses of administering the Plan and the Trust.
1.3 - RIGHTS OF ELIGIBLE EMPLOYEES AND BENEFICIARIES
The rights of eligible employees and their beneficiaries shall be determined
solely under the Plan.
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ARTICLE II
POWERS AND DUTIES OF THE TRUSTEE
2.1 - POWERS AND DUTIES OF TRUSTEE
In the administration of the Trust, the Trustee shall have the powers and duties
set forth in this Article II, in addition to all powers and duties otherwise
expressly set forth in this Trust Agreement. Subject to the other provisions of
this Agreement, the Trustee is empowered:
(a) to invest and reinvest all or any part of Trust units or the Trust,
including both principal and income, in securities pursuant to this
Agreement;
(b) to purchase annuities and hold and retain such contract or contracts as
part of the Trust;
(c) to invest and reinvest all or any part of the Trust under an insurance
contract or contracts that contain provisions relating to a specified rate
of return on such investment;
(d) to sell, lease, exchange, or otherwise dispose of all or any part of the
Trust at such prices, upon such terms and conditions, and in such manner as
it shall determine, including the right to surrender an annuity contract or
contracts at any time held in the Trust;
(e) to exercise, buy, or sell rights of conversion or subscription;
(f) to enter into or oppose any plan of consolidation, merger, reorganization,
capital readjustment, or liquidation of any corporation or other issuer of
securities held hereunder (including any plan for the sale, lease, or
mortgage of any of its property or the adjustment or liquidation of any of
its indebtedness) and, in connection with any such plan, to enter into any
security holders' trust agreement, to deposit securities under such
agreement, and to pay assessments or subscriptions from the other assets
held hereunder;
(g) to retain in cash or in forms of investment otherwise unproductive of
income such portion of the Trust as determined by the Sponsor is
necessitated by the cash requirements of the Trust; provided, however,
that, to the maximum extent feasible, such amounts shall be held which are
productive of income but are sufficiently liquid to meet such cash
requirements;
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(h) to deposit securities held hereunder in any depository;
(i) to transfer to and invest all or any part of the Trust in any collective
investment trust which constitutes an exempt trust within the meaning of
the Code and which is then maintained by a bank or trust company, or any of
its affiliates, when such bank or trust company is acting as Trustee or
agent for the Trustee; provided that the instrument establishing such
collective investment trust, as amended from time to time, shall govern any
investment therein, and is hereby made a part of this Trust Agreement as if
fully set forth herein;
provided further, that, to the extent that the Named Fiduciary selects as
an investment option the Managed Income Portfolio of the Fidelity Group
Trust for Employee Benefit Plans (the "Group Trust"), the Sponsor hereby
agrees to the terms of the Group Trust and adopts said terms as a part of
this Trust Agreement and acknowledges that it has received from the Trustee
a copy of the Group Trust, the Declaration of Separate Fund for the Managed
Income Portfolio of the Group Trust, and the Circular for the Managed
Income Portfolio;
(j) pursuant to the direction of the Administrator, to purchase and sell
interests in a registered investment company registered under the
Investment Company Act of 1940, including those for which the Trustee or an
affiliate of the Trustee serves as investment advisor or sub-advisor and
receives compensation from the registered investment company for its
services as investment advisor or sub-advisor, provided that the applicable
conditions of Department of Labor Transaction Exemption 77-4 are satisfied;
and
(k) to transfer to and invest all or any part of the Trust in any trust which
forms a part of a pension or profit-sharing plan of an Employer or a
Related Company qualified under the Code and which constitutes an exempt
trust within the meaning of the Code; provided that the instrument
establishing such trust, as amended from time to time, shall govern any
investment therein, and is hereby made a part of this Trust Agreement as if
fully set forth herein.
The term "securities", wherever used in this Trust Agreement, shall include
common and preferred stocks, contractual obligations of every kind, whether
secured or unsecured, equitable interests in real or personal property, and
intangible property of every description and howsoever evidenced.
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2.2 - SELECTION OF INVESTMENT FUNDS
The Trustee shall have no responsibility for the selection of Investment Funds
under the Trust and shall not render investment advice to any person in
connection with the selection of such options.
2.3 - AVAILABLE INVESTMENT FUNDS
The Named Fiduciary shall direct the Trustee as to (i) the Investment Funds the
Trust shall be invested in during the Participant recordkeeping reconciliation
period, and (ii) the Investment Funds in which Plan Participants and/or Sponsor
may invest in, subject to the following limitations. The Named Fiduciary may
determine to offer as Investment Funds only (i) securities issued by registered
investment companies registered under the Investment Company Act of 1940
("Mutual Funds"), (ii) notes evidencing loans to Plan Participants in accordance
with the terms of the Plan, (iii) collective investment funds maintained by the
Trustee for qualified plans, and (iv) equity securities issued by the Sponsor or
an affiliate which are publicly-traded and which are "qualifying employer
securities" within the meaning of Section 407(d)(5) of ERISA ("Sponsor Stock");
provided, however, that the Trustee shall be considered a fiduciary with
investment discretion only with respect to Plan assets that are invested in
collective investment funds maintained by the Trustee for qualified plans. The
Mutual Funds and/or collective investment funds initially selected by the Named
Fiduciary are identified in Schedule A attached hereto. The Named Fiduciary may
add additional Mutual Funds and/or collective investment funds with the consent
of the Trustee and upon mutual amendment of Schedule A of this Trust Agreement.
The Sponsor hereby acknowledges that it has received from the Trustee a copy of
the prospectus for each Mutual Fund selected by the Named Fiduciary as a Plan
Investment Fund.
2.4 - PARTICIPANT DIRECTION
Each Plan Participant shall direct the Trustee in which Investment Fund(s) to
invest the assets in the Participant's Separate Account as provided in the Plan.
Such directions may be made by Plan Participants by use of the telephone
exchange system maintained for such purposes by the Trustee or its agent, in
accordance with written telephone exchange guidelines set forth in the service
agreement between the Sponsor and Fidelity Management Trust Company (the
"Service Agreement"). In the event that the Trustee fails to receive a proper
direction, the assets shall be invested in the securities of the Mutual Fund set
forth for such purpose in the Service Agreement, until the Trustee
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receives a proper direction. Additionally, in the event any assets in the
Participant's Separate Account are not subject to the Participant's investment
direction, such assets shall be invested as directed by the Sponsor in
accordance with the Service Agreement.
2.5 - ADJUSTMENT OF CLAIMS
Subject to the consent of the Sponsor, the Trustee is empowered to compromise
and adjust any and all claims, debts, or obligations in favor of or against the
Trust, whether such claims be in litigation or not, upon such terms and
conditions as it shall determine, and to reduce the rate of interest on, to
extend or otherwise modify, to foreclose upon default, or otherwise to enforce
any such claim, debt, or obligation.
2.6 - VOTING RIGHTS
At the time of mailing of notice of each annual or special stockholders' meeting
of any Mutual Fund, the Trustee shall send a copy of the notice and all proxy
solicitation materials to each Participant who has shares of the Mutual Fund
credited to the Participant's Separate Account, together with a voting direction
form for return to the Trustee or designee. The Participant shall have the right
to direct the Trustee as to the manner in which the Trustee is to vote the
shares credited to the Participant's Separate Account (both vested and
unvested), except as otherwise provided in this Section 2.6. The Trustee shall
vote the shares as directed by the Participant; provided, however, that the
Trustee may, in the absence of instructions, vote "present" for the sole purpose
of allowing such shares to be counted for establishment of a quorum at a
shareholders' meeting. The Sponsor shall have the right to direct the Trustee as
to the manner in which the Trustee is to vote the shares of the Mutual Funds in
the Trust during the Participant recordkeeping reconciliation period and any
shares credited to the Participant's Separate Account which are not subject to
Participant direction. With respect to all rights other than the right to vote,
the Trustee shall follow the directions of the Named Fiduciary. The Trustee
shall have no duty to solicit directions from Participants or the Sponsor.
2.7 - PARTICIPANT LOANS
If provided under the terms of the Plan, the Sponsor may direct the Trustee in
writing to establish a separate loan Investment Fund with respect to a
Participant and to transfer assets from any of the other Trust Funds to the
separate loan Investment Fund for the purpose of making loans to the Participant
as provided in
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the Plan. The Trustee shall be required to follow the directions so given to it;
provided, however, that the Trustee shall not be required to follow any
directions which would result in a breach of the Trustee's fiduciary duties.
2.8 - REGISTRATION OF SECURITIES; NOMINEES
The Trustee is empowered to register securities in its own name, or in the name
of its nominee, without disclosing the trust, or to hold the same in bearer
form, and to take title to other property in its own name or in the name of its
nominee without disclosing the trust; provided, however, that the Trustee shall
be responsible for the acts of its nominees.
2.9 - AGENTS, ATTORNEYS, ACTUARIES, AND ACCOUNTANTS
The Trustee is empowered to employ such agents, attorneys (including attorneys
who may be of counsel for the Sponsor), actuaries, and accountants as it may
deem necessary or proper in connection with its duties hereunder, and to
determine and pay the reasonable compensation and expenses of such agents,
attorneys, actuaries, and accountants.
2.10 - DEPOSIT OF FUNDS
The Trustee is empowered to deposit funds, pending investment or distribution
thereof, in the commercial or savings department of any bank, savings and loan
association or trust company supervised by the United States or a state or
agency thereof; and it is authorized to accept such regulations covering the
withdrawal of funds so deposited as it shall deem proper. The Trustee may
deposit all or any part of the Trust, including both principal and interest, in
the banking department of the Trustee (and any of its affiliates) and of any
other fiduciary or party-in-interest with respect to the Trust; provided,
however, that the deposits bear a reasonable rate of interest and are authorized
pursuant to the provisions of Section 408 of ERISA.
2.11 - PAYMENT OF TAXES; INDEMNITY
The Trustee is empowered to pay out of the Trust, as a general charge thereon,
any and all taxes of whatsoever nature assessed on or in respect to the Trust;
provided, however, that, if the Sponsor shall notify the Trustee in writing that
in the opinion of its counsel any such tax is not lawfully assessed, the
Trustee, if so requested by the Sponsor, shall contest the validity of such tax
in any manner deemed appropriate by the Sponsor or its counsel. The word
"taxes", as used herein, shall be deemed to include any interest or penalties
assessed in
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respect to such taxes. Unless the Trustee first shall have been indemnified to
its satisfaction by the Sponsor, the Trustee shall not be required to contest
the validity of any tax, to institute, maintain, or defend against any other
action or proceeding, or to incur any other expense in connection with the
Trust, except to the extent that the Trust is sufficient therefor.
2.12 - RECORDS AND STATEMENTS
The Trustee shall keep accurate records of all receipts, disbursements, and
other transactions affecting the Trust which, together with the assets
comprising the Trust and all evidences thereof, shall be available for
inspection or for the purpose of making copies or reproductions thereof by the
Sponsor or any of its duly authorized representatives. The Trustee shall render
to the Sponsor at intervals agreed to by the Sponsor and the Trustee statements
of receipts and disbursements and of all transactions during the preceding
interval affecting the Trust and a statement of all assets held in the Trust and
the investment performance of the Investment Funds.
2.13 - AUTHORITY
The Trustee is authorized to execute and deliver any and all instruments and to
perform any and all acts which may be necessary or proper to enable it to
discharge its duties under this Trust Agreement and to carry out the powers and
authority conferred upon it. The Sponsor specifically acknowledges and
authorizes that affiliates of the Trustee may act as its agent in the
performance of ministerial, non-fiduciary duties under the Trust. The expenses
and compensation of such agent shall be paid by the Trustee.
2.14 - COURT ACTION NOT REQUIRED
All the powers and authority herein conferred upon the Trustee shall be
exercised by it without the necessity of applying to any court for leave or
confirmation. No person, firm, or corporation dealing with the Trustee shall be
required to ascertain whether the Trustee shall have obtained the approval of
any court or of any person with respect to any action which it may propose to
take hereunder, but every such person, firm, or corporation shall be protected
in relying solely upon the deed, transfer, or assurance of the Trustee.
2.15 - RELIANCE ON WRITTEN DIRECTIONS
Any written direction, request, approval, or other document signed in the name
of the Sponsor or the Administrator by a duly
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authorized individual shall be conclusively deemed to constitute the written
direction, request, approval, or other document of the Sponsor or the
Administrator and the Trustee shall not be liable for any loss, or by reason of
any breach, arising from the direction unless it is clear on the direction's
face that the actions to be taken under the direction would be prohibited by the
fiduciary duty rules of Section 404(a) of ERISA or would be contrary to the
terms of the Plan or this Trust Agreement. The Trustee will be entitled to rely
on the latest certificate it has received from the Sponsor or Administrator as
to any person or persons authorized to act for the Sponsor or Administrator
hereunder and to sign on behalf of the Sponsor or Administrator any directions
or instructions, until it receives from the Sponsor or Administrator written
notice that such authority has been revoked.
2.16 - TRUSTEE'S PERFORMANCE
In the exercise of any of the powers and authority herein conferred upon it, the
Trustee shall adhere at all times to the fiduciary standards established by
ERISA.
2.17 - COUNSEL
The Trustee may consult with counsel selected by it, who may be of counsel for
the Sponsor, as to any matters or questions arising hereunder, and the opinion
of such counsel shall be full and complete authority and protection in respect
to any action taken, suffered, or omitted by the Trustee in good faith and in
accordance with the opinion of such counsel.
2.18 - ANNUITY CONTRACTS
Notwithstanding any other provision of this Trust Agreement or the Plan to the
contrary, the Administrator shall retain all discretionary power relating to any
annuity contract acquired by or delivered to the Trustee. As directed by the
Administrator, the Trustee will acquire, hold and dispose of annuity contracts,
deliver the purchase price, and exercise any and all rights, privileges,
options, and elections under those policies. The Trustee will be fully
discharged with respect to any policy when it is delivered to the Administrator.
2.19 - SPONSOR STOCK
Trust Investments in Sponsor Stock shall be made via the Sponsor Stock Fund (the
"Stock Fund") which shall consist of shares of Sponsor Stock and short-term
liquid investments consisting of Mutual Fund shares or commingled money market
pool units as
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agreed to by the Sponsor and the Trustee, necessary to satisfy the Fund's cash
needs for transfers and payments. A cash target range shall be maintained in the
Stock Fund. Such target range may be changed as agreed to in writing by the
Sponsor and the Trustee. The Trustee is responsible for ensuring that the actual
cash held in the Stock Fund falls within the agreed upon range over time. Each
participant's proportional interest in the Stock Fund shall be measured in units
of participation, rather than shares of Sponsor Stock. Such units shall
represent a proportionate interest in all assets of the Stock Fund, which
includes shares of Sponsor Stock, short-term investments and at times,
receivables for dividends and/or Sponsor Stock sold and payables for Sponsor
Stock purchased. A Net Asset Value ("NAV") per unit will be determined daily for
each cash unit outstanding of the Stock Fund. The return earned by the Stock
Fund will represent a combination of the dividends paid on the shares of Sponsor
Stock held by the Stock Fund, gains or losses realized on sales of Sponsor
Stock, appreciation or depreciation in the market price of those shares owned,
and interest on the short-term investments held by the Stock Fund. Dividends
received by the Stock Fund are reinvested in additional shares of Sponsor Stock.
Investments in Sponsor Stock shall be subject to the following limitations:
(a) Acquisition Limit. Pursuant to the Plan, the Trust may be invested in
Sponsor Stock to the extent necessary to comply with investment directions
under Section 2.4 of this Agreement.
(b) Fiduciary Duty of Named Fiduciary. The Named Fiduciary shall continuously
monitor the suitability under the fiduciary duty rules of section 404(a)(1)
of ERISA (as modified by section 404(a)(2) of ERISA) of acquiring and
holding Sponsor Stock. The Trustee shall not be liable for any loss, or by
reason of any breach, which arises from the directions of the Named
Fiduciary with respect to the acquisition and holding of Sponsor Stock,
unless it is clear on their face that the actions to be taken under those
directions would be prohibited by the foregoing fiduciary duty rules or
would be contrary to the terms of the Plan or this Agreement.
(c) Execution of Purchases and Sales. Purchases and sales of Sponsor Stock
(other than for exchanges) shall be made on the open market on the date on
which the Trustee receives from the Sponsor in good order all information
and documentation necessary to accurately effect such purchases and sales
(or, in the case of purchases, the subsequent date on which the Trustee has
received a wire transfer of the
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funds necessary to make such purchases). Such general rules shall not apply
in the following circumstances:
(i) If the Trustee is unable to determine the number of shares required to
be purchased or sold on such day;
(ii) If the Trustee is unable to purchase or sell the total number of
shares required to be purchased or sold on such day as a result of
market conditions; or
(iii)If the Trustee is prohibited by the Securities and Exchange
Commission, the New York Stock Exchange, or any other regulatory body
from purchasing or selling any or all of the shares required to be
purchased or sold on such day.
In the event of the occurrence of the circumstances described in (i), (ii),
or (iii) above, the Trustee shall purchase or sell such shares as soon as
possible thereafter and shall determine the price of such purchases or
sales to be the average purchase or sales price of all such shares
purchased or sold, respectively. The Trustee may follow directions from the
Named Fiduciary to deviate from the above purchase and sale procedures
provided that such direction is made in writing by the Named Fiduciary.
(d) Purchases and Sales from or to Sponsor. If directed by the Sponsor in
writing prior to the trading date, the Trustee may purchase or sell Sponsor
Stock from or to the Sponsor if the purchase or sale is for adequate
consideration (within the meaning of Section 3(18) of ERISA) and no
commission is charged. If Sponsor contributions or contributions made by
the Sponsor on behalf of the Participants under the Plan are to be invested
in Sponsor Stock, the Sponsor may transfer Sponsor Stock in lieu of cash to
the Trust. In either case, the number of shares to be transferred will be
determined by dividing the total amount of Sponsor Stock to be purchased or
sold by the closing price of the Sponsor Stock on any national securities
exchange on the trading date.
(e) Securities Law Reports. The Named Fiduciary shall be responsible for filing
all reports required under Federal or state securities laws with respect to
the Trust's ownership of Sponsor Stock; including, without limitation, any
reports required under Section 13 or 16 of the Securities Exchange Act of
1934 and shall immediately notify the Trustee in writing of any requirement
to stop purchases or sales of Sponsor Stock pending the filing of any
report. The Trustee
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shall provide to the Named Fiduciary such information on the Trust's
ownership of Sponsor Stock as the Named Fiduciary may reasonably request in
order to comply with Federal or state securities laws.
(f) Voting and Tender Offers. Notwithstanding any other provision of this
Agreement, the provisions of this Section shall govern the voting and
tendering of Sponsor Stock. Each Participant shall be designated a named
fiduciary under ERISA with respect to shares of Sponsor Stock attributable
to units in the Sponsor Stock Fund credited to the Participant's Separate
Account not acquired at the direction of the Participant in accordance with
Section 404(c) of ERISA. The Sponsor, after consultation with the Trustee,
shall provide and pay for all printing, mailing, tabulation and other costs
associated with the voting and tendering of Sponsor Stock.
(i) Voting.
(I) When the issuer of the Sponsor Stock prepares for any annual or
special meeting, the Sponsor shall notify the Trustee thirty (30)
days in advance of the intended record date and shall cause a
copy of all materials to be sent to the Trustee. Based on these
materials the Trustee shall prepare a voting instruction form. At
the time of mailing of notice of each annual or special
stockholders' meeting of the issuer of the Sponsor Stock, the
Sponsor shall cause a copy of the notice and all proxy
solicitation materials to be sent to each Participant with an
interest in Sponsor Stock held in the Trust, together with the
foregoing voting instruction form to be returned to the Trustee
or its designee. The form shall show the proportional interest in
the number of full and fractional shares of Sponsor Stock
credited to the Participant's Sub-Accounts held in the Stock
Fund. The Sponsor shall provide the Trustee with a copy of any
materials provided to the Participants and shall (if the mailing
is not handled by the Trustee) certify that the materials have
been mailed or otherwise sent to Participants.
(II) Each Participant with an interest in the Stock Fund shall have
the right to direct the Trustee as to the manner in which the
Trustee is to vote (including not to vote) that number
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of shares of Sponsor Stock reflecting such Participant's
proportional interest in the Stock Fund (both vested and
unvested). Directions from a Participant to the Trustee
concerning the voting of Sponsor Stock shall be communicated in
writing, or by mailgram or similar means. These directions shall
be held in confidence by the Trustee and shall not be divulged to
the Sponsor, or any officer or employee thereof, or any other
person. Upon its receipt of the directions, the Trustee shall
vote the shares of Sponsor Stock reflecting the Participant's
proportional interest in the Stock Fund as directed by the
Participant. The Trustee shall not vote shares of Sponsor Stock
reflecting a Participant's proportional interest in the Stock
Fund for which it has received no direction from the Participant.
(ii) Tender Offers.
(I) Upon commencement of a tender offer for any securities held in
the Trust that are Sponsor Stock, the Sponsor shall notify each
Participant with an interest in such Sponsor Stock of the tender
offer and utilize its best efforts to timely distribute or cause
to be distributed to the Participant the same information that is
distributed to shareholders of the issuer of Sponsor Stock in
connection with the tender offer, and, after consulting with the
Trustee, shall provide and pay for a means by which the
Participant may direct the Trustee whether or not to tender the
Sponsor Stock reflecting such Participant's proportional interest
in the Stock Fund (both vested and unvested). The Sponsor shall
provide the Trustee with a copy of any material provided to the
Participants and shall (if the mailing is not handled by the
Trustee) certify to the Trustee that the materials have been
mailed or otherwise sent to Participants.
(II) Each Participant shall have the right to direct the Trustee to
tender or not to tender some or all of the shares of Sponsor
Stock reflecting such Participant's proportional
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interest in the Stock Fund (both vested and unvested). Directions
from a Participant to the Trustee concerning the tender of
Sponsor Stock shall be communicated in writing, or by mailgram or
such similar means as is agreed upon by the Trustee and the
Sponsor under the preceding paragraph. These directions shall be
held in confidence by the Trustee and shall not be divulged to
the Sponsor, or any officer or employee thereof, or any other
person, except to the extent that the consequences of such
directions are reflected in reports regularly communicated to any
such persons in the ordinary course of the performance of the
Trustee's services hereunder. The Trustee shall tender or not
tender shares of Sponsor Stock as directed by the Participant.
The Trustee shall not tender shares of Sponsor Stock reflecting a
Participant's proportional interest in the Stock Fund for which
it has received no direction from the Participant.
(III)A Participant who has directed the Trustee to tender some or all
of the shares of Sponsor Stock reflecting the Participant's
proportional interest in the Stock Fund may, at any time prior to
the tender offer withdrawal date, direct the Trustee to withdraw
some or all of the tendered shares reflecting the Participant's
proportional interest, and the Trustee shall withdraw the
directed number of shares from the tender offer prior to the
tender offer withdrawal deadline. A Participant shall not be
limited as to the number of directions to tender or withdraw that
the Participant may give to the Trustee.
(IV) A direction by a Participant to the Trustee to tender shares of
Sponsor Stock reflecting the Participant's proportional interest
in the Stock Fund shall not be considered a written election
under the Plan by the Participant to withdraw, or have
distributed, any or all of his withdrawable shares. The Trustee
shall credit to each proportional interest of the Participant
from which the tendered shares were taken the proceeds received
by the Trustee in exchange for the shares of Sponsor Stock
tendered from that interest. Pending
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receipt of direction (through the Administrator) from the
Participant or the Named Fiduciary, as provided in the Plan, as
to which of the remaining Investment Funds the proceeds should be
invested in, the Trustee shall invest the proceeds in the Mutual
Fund set forth for such purposes in the Service Agreement.
(g) Shares Credited. For all purposes of this Section, the number of shares of
Sponsor Stock deemed "credited" or "reflected" to a Participant's
proportional interest shall be determined as of the last proceeding
Valuation Date. The trade date is the date the transaction is valued.
(h) General. With respect to all rights other than the right to vote, the right
to tender, and the right to withdraw shares previously tendered, in the
case of Sponsor Stock credited to a Participant's proportional interest in
the Stock Fund, the Trustee shall follow the directions of the Participant
and if no such directions are received, the directions of the Named
Fiduciary. The Trustee shall have no duty to solicit directions from
Participants.
(i) Conversion. All provisions in this Section 2.19 shall also apply to any
securities received as a result of a conversion to Sponsor Stock.
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ARTICLE III
PAYMENTS OUT OF THE TRUST
3.1 - PAYMENTS
The Trustee shall make payments from the Trust to such persons in such amounts
and at such times as the Sponsor or the Administrator from time to time shall
direct in writing to be payable under the Plan.
3.2 - COMPENSATION AND EXPENSES
The Trustee shall be entitled to such reasonable compensation for its services
as the Sponsor and the Trustee from time to time shall agree, and shall be
entitled to reimbursement for all reasonable expenses incurred by the Trustee in
the administration of the Trust. All compensation, if applicable, and expenses
of administering the Plan or Trust, including fees assessed against the Plan,
the Trust, the Sponsor, or the Administrator, shall be paid out of the Trust as
a general charge thereon, unless the Sponsor elects to make payment thereof.
3.3 - RETURN OF CONTRIBUTIONS TO THE SPONSOR
Upon written notice of the Sponsor, the Trustee shall pay over to the Sponsor
the amount of any contribution (i) made under a mistake of fact, or (ii)
disallowed as a deduction contribution under Section 404 of the Code, or (iii)
with respect to which the Plan does not qualify initially under Section 401(a)
of the Code or the Trust is not exempt under Section 501(a) of the Code. In no
event shall the Trustee make such payment later than one year after (i) the
payment of the contribution, or (ii) the disallowance of the deduction to the
extent disallowed, or (iii) the date of denial of the initial qualification of
the Plan.
16
ARTICLE IV
SUCCESSION TO THE TRUSTEESHIP
4.1 - RESIGNATION OF THE TRUSTEE
Any Trustee acting hereunder may resign at any time by giving notice in writing
to the Sponsor at least 60 days before such resignation is to become effective,
unless the Sponsor shall accept as adequate a shorter notice.
4.2 - REMOVAL OF THE TRUSTEE
The Sponsor may, with or without cause, remove any Trustee acting hereunder by
giving notice in writing to the Trustee at least 60 days before such removal is
to become effective, unless the Trustee shall accept as adequate a shorter
notice.
4.3 - APPOINTMENT OF A SUCCESSOR TRUSTEE
If for any reason a vacancy should occur in the trusteeship, a successor Trustee
shall forthwith be appointed by the Sponsor. Any successor Trustee appointed
hereunder shall execute, acknowledge, and deliver to the Sponsor an instrument
in writing accepting such appointment hereunder. Such successor Trustee
thereupon shall become vested with the same title to the property comprising the
Trust, and shall have the same powers and duties with respect thereto, as are
hereby vested in the original Trustee. The predecessor Trustee shall execute all
such instruments and perform all such other acts as the successor Trustee or
Sponsor shall reasonably request to effectuate the provisions hereof. The
successor Trustee shall have no duty to inquire into the administration of the
Trust for any period prior to its succession.
17
ARTICLE V
AMENDMENT
5.1 - RIGHT OF AMENDMENT
The Sponsor reserves the right, at its sole discretion, from time to time to
amend the provisions of this Trust Agreement in any manner; provided, however,
that the powers, duties, and immunities of the Trustee under this Trust
Agreement shall not be substantively changed without its written approval. Any
such amendment shall be by written instrument executed by the Sponsor and
delivered to the Trustee, and may be made retroactively if in the opinion of the
Sponsor such amendment is necessary to enable the Plan and the Trust to meet the
requirements of the Code (including the regulations and rulings issued
thereunder) or the requirements of any governmental authority.
5.2 - LIMITATION ON AMENDMENT
The Sponsor shall make no amendment to this Trust Agreement that results in the
forfeiture or reduction of the accrued benefit of any Participant or
Beneficiary. Notwithstanding the preceding sentence, nothing herein contained
shall restrict the right to amend the provisions of this Trust Agreement
relating to the administration of the Plan and the Trust. Moreover, no such
amendment shall be made under this Article which shall permit any part of the
Trust to revert to the Sponsor or any Related Company or to be used for or be
diverted to purposes other than for the exclusive benefit of Participants and
Beneficiaries.
18
ARTICLE VI
MISCELLANEOUS
6.1 - VALIDITY OF TRUST AGREEMENT
The validity of this Trust Agreement shall be determined and this Trust
Agreement shall be construed in accordance with the laws of the Commonwealth of
Massachusetts, except to the extent that they are superseded by Section 514 of
ERISA. The invalidity or illegality of any provision of this Trust Agreement
shall not affect the validity or legality of any other part hereof.
6.2 - NO GUARANTEES
Neither the Sponsor nor the Trustee guarantees the Trust from loss or
depreciation.
6.3 - DUTY TO FURNISH INFORMATION
The Administrator, the Employers, and the Trustee shall furnish to any of the
others any documents, reports, returns, statements, or other information that
such other reasonably deems necessary to perform its duties imposed under the
Plan or this Trust Agreement or otherwise imposed by law.
6.4 - FEDERAL INCOME TAX WITHHOLDING
The Trustee shall not be responsible for withholding federal and state income
tax from distributions unless the Administrator provides the Trustee with the
following information concerning each distribution:
(a) The name, address, and social security number of the Participant (and the
Participant's spouse or other Beneficiary if applicable). By forwarding
such information, the Administrator shall be deemed hereby to have
certified the accuracy of such information.
(b) A statement of the reason for the payment or distribution and directions as
to the type of distribution (e.g., eligible rollover distribution)
requested.
If the Administrator does not provide the Trustee with the above information,
the responsibility for withholding federal and state income taxes and the
reporting thereof shall remain with the Administrator.
19
6.5 - PARTIES BOUND
This Trust Agreement shall be binding upon the parties hereto, all Participants,
and persons claiming under or through them pursuant to the Plan, and, as the
case may be, the heirs, executors, administrators, successors, and assigns of
each of them.
6.6 - INDEMNIFICATION BY SPONSOR
The Sponsor shall indemnify and save harmless from and against any and all
liability to which the Trustee may be subjected by reason of any act or conduct
in its capacity as Trustee, including all expenses reasonably incurred in its
defense, except for losses or expenses resulting from the negligence or willful
misconduct of the Trustee or its affiliates.
6.7 - BONDING REQUIREMENTS
Every fiduciary, except a bank or an insurance company, unless exempted by ERISA
and the regulations thereunder, shall be bonded in an amount not less than ten
percent of the funds such fiduciary handles; provided, however, that the minimum
bond shall be $1,000 and the maximum bond shall be $500,000. The amount of funds
handled shall be determined at the beginning of each Plan Year by the amount of
funds handled by such person, group, or class to be covered and their
predecessors, if any, during the preceding Plan Year, or if there is no
preceding Plan Year, then by the amount of the funds to be handled during the
then current Plan Year. The bond shall provide protection to the Plan against
any loss by reason of acts of fraud or dishonesty by the fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Section 412(a)(2) of ERISA), and the bond shall be in a form
approved by the Secretary of Labor. Notwithstanding anything to the contrary
contained in the Plan or this Trust Agreement, the cost of such bonds shall be
an expense of and may, at the election of the Sponsor, be paid from the Trust or
by the Sponsor.
6.8 - SEPARATE TRUST OR FUND FOR EXISTING PLAN ASSETS
With the consent of the Trustee, an Employer may maintain a trust or fund
(including a group annuity contract) under the Plan separate from the Trust Fund
to hold Plan assets acquired prior to the effective date of this Trust Agreement
which are not among the available Investment Funds provided under Section 2.3.
The duties and responsibilities of the trustee of the separate trust
(hereinafter referred to as the "trustee") shall be provided by a separate trust
agreement between the Employer and the trustee.
20
Notwithstanding the preceding paragraph, the Trustee or an affiliate of the
Trustee may agree in writing to provide ministerial recordkeeping service for
guaranteed investment contracts held in the separate trust or fund. Any such
guaranteed investment contract shall be valued as directed by the Employer or
the trustee.
The trustee shall be the owner of any insurance contract purchased prior to the
effective date of this Trust Agreement. Any such insurance contract must provide
that the proceeds will be payable to the trustee; provided, however, that the
trustee shall be required to pay over all proceeds of the contract to the
Participant's Beneficiary in accordance with the distribution provisions of the
Plan. Under no circumstances will the Trust Fund retain any part of the
proceeds. In the event of any conflict between the terms of the Plan and the
terms of any insurance contract held hereunder, the Plan provisions shall
control.
Any life insurance contracts held in the Trust Fund or in the separate trust
shall be subject to the provisions of Article IX of the Plan.
21
* * *
EXECUTED AT Newport Beach ,
--------------------------------------------
California , this 18th day of September , 1997.
----------------------- ----- -------------- ----
DOWNEY SAVINGS AND LOAN
ASSOCIATION, F.A.
By /s/ XxXxxx X. Xxxx
------------------------------
Title:SVP, Director of Human Resources
FIDELITY MANAGEMENT TRUST COMPANY
By /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------
Title:
22
* * *
EXECUTED AT Newport Beach ,
--------------------------------------------
California , this 18th day of September , 1997.
----------------------- ----- -------------- ----
DOWNEY SAVINGS AND LOAN
ASSOCIATION, F.A.
By /s/ XxXxxx X. Xxxx
------------------------------
Title:SVP, Director of Human Resources
FIDELITY MANAGEMENT TRUST COMPANY
By /s/ Xxxxxxxxx X. Xxxxxxx
------------------------------
Title:
23
SCHEDULE A
INVESTMENT FUNDS
Participant accounts under the Trust shall be invested among the Mutual Funds or
collective investment funds listed below pursuant to Participant and/or Sponsor
directions.
Fund Name Fund Number
--------- -----------
1) Fidelity Retirement Money Market Portfolio 0631
2) Fidelity Puritan Fund 0004
3) Fidelity Growth & Income Portfolio 0027
4) Fidelity Low Priced Stock Fund 0316
5) PIMCO Low Duration Fund OFP6
6) Xxxxxxxxx Foreign Fund OFJT
24
