EXHIBIT 10.7
A copy of Trust Under Salary Continuation Plan for Xxxx X. XxXxxxxxxx
dated May 15, 2002.
TRUST UNDER SALARY CONTINUATION PLAN
FOR XXXX X. XXXXXXXXXX
THIS AGREEMENT made this 15th day of May, 2002, by and between
Golden Enterprises, Inc., a Delaware corporation ("Company")
and Golden Enterprises, Inc. ("Trustee");
WHEREAS, Company has adopted the nonqualified Salary Continuation
Plan for Xxxx X. XxXxxxxxxx, a copy of which is attached hereto as
Appendix 1 (the "Plan").
WHEREAS, Company has incurred or expects to incur liability under
the terms of such Plan to Xxxx X. XxXxxxxxxx (herein referred to
as the "Plan Participant"), the individual participating in such
Plan; and
WHEREAS, Company wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be
held therein, subject to the claims of Company's creditors
in the event of Company's Insolvency, as herein defined, until
paid to the Plan Participant or his beneficiaries in such
manner and at such times as
specified in the Plan; and
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status
of the Plan as an unfunded Plan maintained for the purpose of
providing deferred compensation for a select member of management
or highly compensated employee for purposes of Title I of
the Employee Retirement Income Security Act of 1974; and
WHEREAS, it is the intention of Company to make contributions
to the Trust to provide itself with a source of funds to
assist it in the meeting of its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust
and agree that the Trust shall be comprised, held and disposed
of as follows:
Section 1. ESTABLISHMENT OF TRUST.
(a) Company hereby deposits with Trustee in trust the sum of $100.00,
which shall become the principal of the Trust to be held,
administered and disposed of by Trustee as provided in this
Trust Agreement.
(b) The Trust hereby established is revocable by Company; it shall
become irrevocable upon a Change of Control, as defined herein.
(c) The Trust is intended to be a grantor Trust, of which Company is
the grantor, within the meaning of subpart E, part I, subchapter
J, chapter 1, subtitle A of the Internal Revenue Code of 1986,
as amended, and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used
exclusively for the uses and purposes of the Plan Participant, his
beneficiaries and general creditors of the Company as herein set
forth. The Plan Participant and his beneficiaries shall have no
preferred claim on, or any beneficial ownership interest
in, any assets of the Trust. Any rights created under the Plan
and this Trust Agreement
shall be mere unsecured contractual rights of the Plan Participant
and his beneficiaries against Company. Any assets held by the
Trust will be subject to the claims of Company's general creditors
under federal and state law in the event of Insolvency, as
defined in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or from time
to time, make additional deposits of cash or other property in
trust with Trustee to augment the principal to be held, administered
and disposed of by Trustee as provided in this Trust Agreement.
Neither Trustee nor the Plan Participant or any beneficiary shall
have any right to compel such additional deposits except as required
by the Plan.
(f) Upon the date of a Change of Control, as defined herein,
Company shall make an irrevocable contribution to the Trust in
an amount that is sufficient to pay the Plan Participant or
beneficiaries the benefits to which the Plan Participant or
his beneficiaries would be entitled pursuant to the terms of the
Plan as of the date on which the Change of Control occurred.
Section 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the "Payment
Schedule") that indicates the amounts payable to the Plan
Participant (or his beneficiaries), that provides a formula
or other instructions acceptable to Trustee for determining
the amounts so payable, the form in which such amount is to be
paid (as provided for or available under the Plan), and the
of commencement for payment of such amounts. Except
as otherwise provided herein, Trustee shall make
payments to the Plan Participant and his beneficiaries in
accordance with such Payment Schedule. The Trustee shall make
provision for the reporting and withholding of any federal,
state or local taxes that may be required to be withheld
with respect to the payment of benefits pursuant to the
terms of the Plan and shall pay amounts withheld to
the appropriate taxing authorities or determine that
such amounts have been reported, withheld and paid by
Company.
(b) The entitlement of the Plan Participant or his beneficiaries to
benefits under the Plan shall be determined by Company or such party
as it shall designate under the Plan, and any claim for such benefits
shall be considered and reviewed under the procedures set out
in the Plan.
(c) Company may make payment of benefits directly to the Plan
Participant or his beneficiaries as they become due under the
terms of the Plan. Company shall notify Trustee of its decision to
make payment of benefits directly prior to the time amounts are
payable to the Plan Participant or his beneficiaries. In addition,
if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms
of the Plan, Company shall make the balance of each such payment
as it falls due. Trustee shall notify Company where principal and
earnings are not sufficient.
Section 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to the Plan Participant
or his beneficiaries if the Company is Insolvent. Company
shall be considered "Insolvent" for purposes of this Trust Agreement
if (i) Company is unable to pay its debts as they become due, or (ii)
Company is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be
subject to claims of general creditors of Company under federal and
state law as set forth below.
(1) The Chief Executive Officer of Company shall have the
duty to inform Trustee in writing of Company's Insolvency. If a
person claiming to be a creditor of Company alleges in writing to
Trustee that Company has become Insolvent, Trustee shall determine
whether Company is Insolvent and, pending such determination,
Trustee shall discontinue payment of benefits
to the Plan Participant or his beneficiaries.
(2) Unless Trustee has actual knowledge of Company's
Insolvency, or has received notice from Company or a person
claiming to be a creditor alleging that Company is Insolvent,
Trustee shall have no duty to inquire whether Company is Insolvent.
Trustee may in all events rely on such evidence concerning
Company's solvency as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a
determination concerning Company's solvency.
(3) If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to the Plan
Participant or his beneficiaries and shall hold the assets of
the Trust for the benefit of Company's general creditors.
Nothing in this Trust Agreement shall in any way diminish any
rights of the Plan Participant or his beneficiaries to pursue
their rights as general creditors of Company with respect to
benefits due under the Plan or otherwise.
(4) Trustee shall resume the payment of benefits to the
Plan Participant or his beneficiaries in accordance with
Section 2 of this Trust Agreement only after Trustee has
determined that Company is not Insolvent (or is no
longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee
discontinues the payment of benefits from the Trust
pursuant to Section 3(b) hereof and subsequently resumes such
payments, the first payment following such discontinuance
shall include the aggregate amount of all payments due to
the Plan Participant or his beneficiaries under the
terms of the Plan for the period of such discontinuance,
less the aggregate amount of any payments made to the
Plan Participant or his beneficiaries by Company in lieu
of the payments provided for hereunder during any such
period of discontinuance.
Section 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, after the Trust has
Become irrevocable, Company shall have no right or power to direct
Trustee to return to Company or to divert to others any of
the Trust assets before all payment of benefits have been
made to the Plan Participant and his beneficiaries
pursuant to the terms of the Plan.
Section 5. INVESTMENT AUTHORITY.
In no event may Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by Company,
other than a de minimis amount held in common investment
vehicles in which Trustee invests. All rights associated
with assets of the Trust shall be exercised by Trustee or
the person designated by Trustee, and shall in no event be
exercisable by or rest with Plan Participant.
Section 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the
Trust, net of expenses and taxes, shall be accumulated and
reinvested.
Section 7. ACCOUNTING BY TRUSTEE.
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in
writing between Company and Trustee. Within 90 days following the
close of each calendar year and within 60 days after the removal
or resignation of Trustee, Trustee shall deliver to Company a
written account of its administration of the Trust during such
year or during the period from the close of the last preceding
year to the date of such removal or resignation, setting forth
all investments, receipts, disbursements and other transactions
effected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds
of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other
property held in the trust at the end of such year or as of
the date of such removal or resignation, as the case may be.
Section 8. RESPONSIBILITY OF TRUSTEE.
(a) Trustee shall act with the care, skill, prudence and diligence
under the circumstances then prevailing that a
prudent person acting in like capacity and familiar
with such matters would use in the conduct of an
enterprise of a like character and with like aims,
provided, however, that Trustee shall incur no liability
to any person for any action taken pursuant to a direction,
request or approval given by Company which is contemplated by,
and in conformity with, the terms of the Plan or this Trust and
is given in writing by Company. In the event of a dispute between
Company and the Plan Participant or of any beneficiary, Trustee may
apply to a court of competent jurisdiction to resolve the dispute.
(b) If Trustee undertakes or defends any litigation arising
in connection with this Trust, Company agrees to indemnify
Trustee against Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses)
relating thereto and to be primarily liable for such payments.
If Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, Trustee may obtain payment
from the Trust.
(c) Trustee may consult with legal counsel (who may also be counsel
for Company generally) with respect to any of its duties or
obligations hereunder.
(d) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to
assist it in performing any of its duties or obligations
hereunder.
(e) Trustee shall have, without exclusion, all powers conferred
on Trustees by applicable law, unless expressly provided
otherwise herein, provided, however, that if
an insurance policy is held as an asset of the Trust,
Trustee shall have no power to name a beneficiary of
the policy other than the Trust, to assign the policy (as distinct
from conversion of the policy to a different form) other than
to a successor Trustee, or to loan to any person the
proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to Trustee pursuant
to this Trust Agreement or to applicable law, Trustee shall
not have any power that could give this Trust the objective
of carrying on a business and dividing the gains therefrom,
within the meaning of section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the
Internal Revenue Code.
Section 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all administrative and Trustee's fees and expenses.
If not so paid, the fees and expenses shall be paid from the Trust.
Section 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective 30 days after receipt of such notice unless C
ompany and Trustee agree otherwise.
(b) Trustee may be removed by company on 30 days notice or
upon shorter notice accepted by Trustee.
(c) Upon a Change of Control, as defined herein, Trustee may not
be removed by Company without the written consent and approval
of the Plan Participant.
(d) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to
the successor Trustee. The transfer shall be completed within
30 days after receipt of notice of resignation, removal or
transfer, unless Company extends the time limit.
(e) Trustee may be removed by the Plan Participant within 90
days of a Change of Control, as defined herein. The Plan
Participant shall select a successor Trustee in accordance
with the provisions of Section 11(c) hereof prior to the
effective date of Trustee's removal.
(f) If Trustee resigns or is removed, a successor shall be appointed,
in accordance with Section 11 hereof, by the effective date of
resignation or removal under paragraphs (a) or (b) of this section.
If no such appointment has been made, Trustee may apply to a court
of competent jurisdiction for appointment of a successor or for
instructions. All expenses of Trustee in connection with
proceeding shall be allowed as administrative expenses of the Trust.
(g) The Successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing
Trust assets, subject to Sections 7 and 8 hereof. The Successor
Trustee shall not be responsible for and Company shall indemnify
and defend the Successor Trustee from any claim or liability
resulting from any action or inaction of any prior Trustee
or from any other past event, or any condition existing
at the time it becomes Successor Trustee.
Section 11. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee and Company. Notwithstanding the foregoing,
no such amendment shall conflict with the terms of the
Plan or shall make the Trust revocable after it has
become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which
the Plan Participant and his beneficiaries are no longer entitled
to benefits pursuant to the terms of the Plan, unless sooner
revoked in accordance with Section 1(b) hereof. Upon
termination of the Trust any assets remaining in the Trust
shall be returned to Company.
(c) If Trustee is removed pursuant to the provisions of
Section 10(e) hereof and the Plan Participant selects a
successor Trustee, the Plan Participant may appoint any
third party which constitutes an unrelated party pursuant
to the Internal Revenue Code of 1986, as amended, or any
successor thereto. The appointment of a successor Trustee
shall be effective when accepted in writing by the new Trustee.
The new Trustee shall have all the rights and powers of
the former Trustee, including ownership rights in Trust
assets. The former Trustee shall execute any instrument
necessary or reasonably requested by the successor Trustee
to evidence the transfer.
Section 13. MISCELLANEOUS.
(a) Any provision of this Trust Agreement prohibited by law
shall be ineffective to the extent of any such prohibition,
without invalidating the remaining provisions hereof.
(b) Benefits payable to Plan Participant and his beneficiaries
under this Trust Agreement may not be anticipated, assigned
(either at law or in equity), alienated, pledged,
encumbered or subjected to attachment, garnishment, levy,
execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed
in accordance with the laws of State of Alabama.
(d) For purposes of this Trust, Change of Control shall mean any
event in which a majority of the Company's stock is not owned,
directly or indirectly, by Xxxxx X. Xxxxxxxxx, Xx., his estate,
any testamentary trust of Xxxxx X. Xxxxxxxxx, Xx. or SYB, Inc.
Section 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be May 15, 2002.
GOLDEN ENTERPRISES, INC.
By: /S/ XXXX X. XXXXX
Its: Chairman
GOLDEN ENTERPRISES, INC., TRUSTEE
By: /S/ XXXX X. XXXXX
Its: Chairman
