TRUST AGREEMENT
GRACO INC. NONEMPLOYEE DIRECTOR
DEFERRED STOCK ACCOUNT
THIS TRUST AGREEMENT, Made and entered into as of September 30, 1997, by
and between GRACO INC., a Minnesota corporation (hereinafter sometimes referred
to as "Graco"), and NORWEST BANK MINNESOTA, N.A., a national banking
association, as trustee (said trustee and its successor or successors in trust
from time to time being hereinafter collectively referred to as "Trustee"):
WHEREAS, Graco has established a nonemployee director stock plan for the
benefit of its outside directors by the adoption of a document known as the
"GRACO INC. NONEMPLOYEE DIRECTOR STOCK PLAN" (the "Plan"); and
WHEREAS, Graco may from time to time hereafter amend, renew and
extend such Plan; and
WHEREAS, Graco has determined that it will establish a trust fund
which, subject to the claims of creditors of Graco, shall be held to pay such
portion of the benefits under the Plan which Graco does not directly pay; and
WHEREAS, the creation of such a trust fund requires that Graco
select a Trustee and enter into a Trust Agreement; and
WHEREAS, this is the Trust Agreement so contemplated; and
WHEREAS, the Trustee has agreed to serve as Trustee according to the
terms of this Trust Agreement and the officers of Graco are authorized to
execute this Trust Agreement on behalf of Graco;
NOW, THEREFORE, in consideration of the premises, the parties hereto
do hereby agree as follows:
SECTION 1
INTRODUCTION
1.1. Definitions. When used herein with initial capital letters, the
following words have the following meanings:
1.1.1. Administrator - the Secretary of Graco appointed by the Plan to
administer this Trust.
1.1.2. Beneficiary - a person designated by a Participant (or
automatically by operation of the Plan) to receive any benefit remaining at
the death of a Participant under the terms of the Plan.
1.1.3. Change in Control
1.1.3.1 A Change of Control means any one of the following
events:
1.1.3.1(a) acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act), (a "Person"), of beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) which results in
the beneficial ownership by such Person of 25% or more of either
1.1.3.1(a)(1) the then outstanding shares of Common
Stock of the Company (the "Outstanding Company Common
Stock") or
1.1.3.1(a)(2) the combined voting power of the then
outstanding voting securities of the Company entitled to
vote generally in the election of directors (the
"Outstanding Company Voting Securities");
provided, however, that the following acquisitions will not
result in a Change of Control:
(i) an acquisition directly from the Company,
(ii) an acquisition by the Company,
(iii) an acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or
any corporation controlled by the Company,
(iv) an acquisition by any Person who is deemed to have
beneficial ownership of the Common Stock or other voting
securities of the Company owned by the Trust Under the Will
of Xxxxxxxx X. Xxxx ("Trust Person"), provided that such
acquisition does not result in the beneficial ownership by
such Person of 32% or more of either the Outstanding Company
Common Stock or the Outstanding Company Voting Securities,
and provided further that for purposes of this Section
1.1.3, a Trust Person shall not be deemed to have beneficial
ownership of the Common Stock or other voting securities of
the Company owned by The Graco Foundation or any employee
benefit plan of the Company, including the Graco Employee
Retirement Plan and the Graco Employee Stock Ownership Plan,
(v) an acquisition by the Participating Director or
any group that includes the Participating Director, or
(vi) an acquisition by any corporation pursuant to a
transaction that complies with clauses (1), (2) and (3) of
subsection 1.1.3.1(d) below; and
provided, further, that if any Person's beneficial ownership of
the Outstanding Company Common Stock or Outstanding Company
Voting Securities is 25% or more as a result of a transaction
described in clause (i) or (ii) above, and such Person
subsequently acquires beneficial ownership of additional
Outstanding Company Common Stock or Outstanding Company Voting
Securities as a result of a transaction other than that described
in clause (i) or (ii) above, such subsequent acquisition will be
treated as an acquisition that causes such Person to own 25% or
more of the Outstanding Company Common Stock or Outstanding
Company Voting Securities and be deemed a Change of Control; and
provided further, that in the event any acquisition or other
transaction occurs which results in the beneficial ownership of
32% or more of either the Outstanding Company Common Stock or the
Outstanding Company Voting Securities by any Trust Person, the
Incumbent Board, as defined below, may by majority vote increase
the threshold beneficial ownership percentage to a percentage
above 32% for any Trust Person; or
1.1.3.1(b) individuals who, as of the date hereof,
constitute the Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least a majority of
said Board; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board will be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial membership on
the Board occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board, or
1.1.3.1(c) the commencement or announcement of an intention
to make a tender offer or exchange offer, the consummation of
which would result in the beneficial ownership by a Person of 25%
or more of the Outstanding Company Common Stock or Outstanding
Company Voting Securities; or
1.1.3.1(d) the approval by the shareholders of the Company
of a reorganization, merger, consolidation or statutory exchange
of Outstanding Company Common Stock or Outstanding Company Voting
Securities or sale or other disposition of all or substantially
all of the assets of the Company ("Business Combination") or, if
consummation of such Business Combination is subject, at the time
of such approval by shareholders, to the consent of any
government or governmental agency, the obtaining of such consent
(either explicitly or implicitly by consummation); excluding,
however, such a Business Combination pursuant to which
1.1.3.1(d)(1) all or substantially all of the
individuals and entities who were the beneficial owners of
the Outstanding Company Common Stock or Outstanding Company
Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than 80% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the
corporation resulting from such Business Combination
(including, without limitation, a corporation that as a
result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock
or Outstanding Company Voting Securities,
1.1.3.1(d)(2) no Person (excluding any employee benefit
plan, or related trust, of the Company or such corporation
resulting from such Business Combination) beneficially owns,
directly or indirectly, 25% or more of the then outstanding
shares of common stock of the corporation resulting from
such Business Combination or the combined voting power of
the then outstanding voting securities of such corporation,
except to the extent that such ownership existed prior to
the Business Combination, and
1.1.3.1(d)(3) at least a majority of the members of the
board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of
the action of the Board, providing for such Business
Combination; or
1.1.3.1(e) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
1.1.3.2 A Change of Control shall not be deemed to have occurred
with respect to a Participating Director if:
1.1.3.2(a) the acquisition of the 25% or greater interest
referred to in subparagraph 1.1.3.1(a) of this Section 1.1.3 is
by a group, acting in concert, that includes the Participating
Director or
1.1.3.2(b) if at least 25% of the then outstanding common
stock or combined voting power of the then outstanding company
voting securities (or voting equity interests) of the surviving
corporation or of any corporation (or other entity) acquiring all
or substantially all of the assets of the Company shall be
beneficially owned, directly or indirectly, immediately after a
reorganization, merger, consolidation, statutory share exchange,
disposition of assets, liquidation or dissolution referred to in
subparagraph 1.1.3.1(d) or 1.1.3.1(e) of this Section by a group,
acting in concert, that includes that Participating Director.
1.1.4. Common Stock - common shares of Graco, par value $1.00.
1.1.5. Company - GRACO INC., a Minnesota corporation, and any
successor thereof that adopts the Plan.
1.1.6. Fund - the assets held under this Trust Agreement by the
Trustee from time to time, including all contributions of the Company and
the investments and reinvestments, earnings and profits thereon.
1.1.7. Insolvent, Insolvency - the condition which exists when Company
is: (i) generally unable to pay its debts when they are due, or (ii)
subject to a pending proceeding as a debtor under the United States
Bankruptcy Code.
1.1.8. Participant - a nonemployee director of the Company who has
become and remains a participant in the Plan in accordance with the
provisions of the Plan.
1.1.9. Plan - the unfunded, nonqualified "GRACO INC. NONEMPLOYEE
DIRECTOR STOCK PLAN" of the Company which has been established for the
benefit of the nonemployee directors of the Company eligible to participate
therein.
1.1.10. Trust Agreement - this written document entitled "TRUST
AGREEMENT, GRACO NONEMPLOYEE DIRECTOR DEFERRED STOCK ACCOUNT" entered into
by and between Company and the Trustee effective as of September 30, 1997,
as the same may be amended from time to time thereafter.
1.1.11. Trustee - the Trustee originally named hereunder and its
successor in Trust.
1.2. Rules of Interpretation. Whenever appropriate, words used herein in
the singular may be read in the plural, or words used herein in the plural may
be read in the singular; the masculine may include the feminine; and the words
"hereof", "herein" or "hereunder" or other similar compounds of the word "here"
shall mean and refer to this entire Trust Agreement and not to any particular
paragraph or section of this Trust Agreement unless the context clearly
indicates to the contrary. The titles given to the various sections of this
Trust Agreement are inserted for convenience of reference only and are not part
of this Trust Agreement, and they shall not be considered in determining the
purpose, meaning or intent of any provision hereof. Any reference in this Trust
Agreement to a statute or regulation shall be considered also to mean and refer
to any subsequent amendment or replacement of that statute or regulation. This
instrument has been executed and delivered in the State of Minnesota and has
been drawn in conformity to the laws of that State and shall be construed and
enforced in accordance with the laws of the State of Minnesota.
SECTION 2
ESTABLISHMENT OF TRUST
2.1. Establishment of Trust. Company hereby deposits with Trustee in Trust
One Hundred Dollars and no/100 ($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. The Company shall make additional deposits of cash or
other property from time to time as it may determine in its sole and absolute
discretion. Neither Trustee nor any Participant or Beneficiary shall have any
right to compel any additional deposits.
2.2. Fund Established. A Fund is hereby established by Company. The Fund
shall be held by Trustee in Trust and dealt with in accordance with the
provisions of this Trust Agreement. This Trust Agreement is intended to create a
trust which is a grantor trust within the meaning of section 671 of the Internal
Revenue Code, as amended, and shall be construed accordingly. The principal of
the Trust, and any earnings thereon shall be held separate and apart from other
funds of the Company and shall be used exclusively for the uses and purposes of
Plan Participants and general creditors as herein set forth. Plan Participants
and their Beneficiaries shall have no preferred claim on, or any beneficial
ownership interest in, any assets of the Trust. Any rights created under the
Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan
Participants and their Beneficiaries against Company. Any assets held by the
Trust will be subject to the claims of Company's general creditors under federal
and state law in the event of Insolvency.
2.3. Revocable Trust. The Trust hereby established is revocable by Company;
it shall become irrevocable upon a Change in Control, as defined herein.
SECTION 3
PAYMENTS TO PLAN PARTICIPANTS
AND THEIR BENEFICIARIES
3.1. Company shall deliver to Trustee from time to time one or more
schedules (the "Payment Schedule") that indicate the amounts payable in respect
of each Participant (and his or her 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 time of commencement for payment of such amounts. Except as
otherwise provided herein, Trustee shall make payments to the Participants or
their Beneficiaries in accordance with the Payment Schedule. Company may direct
Trustee, with Trustee's consent, to withhold, report and remit any federal,
state and local taxes that may be required to be withheld with respect to the
payments of benefits pursuant to the terms of the Plan and Trustee shall pay the
amounts withheld to the appropriate taxing authorities. In the event Company
does not direct the Trustee or Trustee does not consent to withhold, report and
remit all federal, state and local taxes, the Company will perform such
activities itself.
3.2. The entitlement of a Participant or Beneficiary 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 forth in the Plan.
3.3. Company may make payment of benefits directly to Participants or
their Beneficiaries as they become due under the terms of the Plan. Company
shall notify Trustee of its decision to make payment of benefits within a
reasonable time prior to the time amounts are payable to Participants or their
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 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 payments of
benefits have been made to Plan Participants and their Beneficiaries pursuant to
the terms of the Plan. Prior to the date the Trust becomes irrevocable, the
Company may request the Trustee to return assets to the Company which are
determined by the Company to be in excess of amounts reasonably believed
necessary to satisfy the claims of all Participants and Beneficiaries under the
terms of the Plan.
SECTION 5
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT
5.1. Cease Payments. Trustee shall cease payment of benefits to
Participants and Beneficiaries if the Company is insolvent.
5.2. Claims of Creditors. At all times during the continuance of this
Trust, 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.
5.2.1. The Administrator and the Chief Executive Officer of the
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 Participants or
Beneficiaries.
5.2.2. 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.
5.2.3. If at any time Trustee has determined that Company is
Insolvent, Trustee shall discontinue payments to Participants and
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 Participants and Beneficiaries to pursue their
rights as general creditors of Company with respect to benefits due under
the Plan or otherwise.
5.2.4. Trustee shall resume the payment of benefits to Participants
and Beneficiaries in accordance with Section 3 of this Agreement only after
Trustee has determined that Company is not Insolvent ( or is no longer
Insolvent).
5.3. Resumption of Payments. Provided that there are sufficient assets, if
Trustee discontinues the payment of benefits from the Trust pursuant to Section
5 hereof and subsequently resumes such payments, the first payment following
such discontinuance shall include the aggregate amount of all payments due to
Participants and Beneficiaries under the terms of the Plan for the period of
such discontinuance, less the aggregate amount of payment, if any, made to
Participants and Beneficiaries by Company pursuant to the Plan during any such
period of discontinuance.
SECTION 6
INVESTMENT AUTHORITY
Trustee shall invest any funds transferred to it by Company in such manner
as may be directed by Company. In the event Company fails to give such
instructions to Trustee, Trustee shall then have full authority to invest any
funds transferred to it by Company as Trustee sees fit, consistent with the
terms and conditions of this Trust Agreement and the Plan. Notwithstanding
anything to the contrary, if so directed by the Company, the Trustee shall
invest all or any portion of the Fund in securities (including stock or rights
to acquire stock) or obligations issued by Company. All voting rights associated
with assets of the Trust consisting of Common Stock of the Company shall be
exercisable by the Participants or Beneficiaries in proportion to the number of
shares of Common Stock of the Company held in the deferred stock account
established under the Plan for each such Participant or Beneficiary as of the
applicable record date as determined by the Administrator and pursuant to such
rules as may be established by the Administrator and the Trustee. All other
rights associated with assets of the Trust, including voting rights with respect
to any equity securities held by the Trust (but not including Common Stock of
the Company), shall be exercised by Trustee or the person designated by Trustee,
and shall in no event be exercisable by or rest with Participants.
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.
SECTION 7
DISPOSITION OF INCOME
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, if any, shall be accumulated and reinvested in accordance
with the terms hereof. All cash dividends, if any, paid with respect to the
Common Stock of the Company shall be reinvested in Common Stock of the Company.
SECTION 8
ACCOUNTING BY TRUSTEE
Trustee shall keep accurate and detailed records of all investments,
receipts, disbursements, and all other transactions required to be made,
including such specific records as shall be agreed upon in writing between
Company and Trustee. Within sixty (60) days following the close of each calendar
year, or such other date or dates specified by the Company and within sixty (60)
days after the removal or resignation of Trustee, Trustee shall deliver to
Company a written account of its administration of the Trust during such year or
during the period from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of all securities
and investments purchased and sold with the cost of 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. It is recognized that in the operation and administration of the Trust
certain mathematical or accounting errors may be made or mistakes may arise by
reason of errors in information supplied to Trustee. Trustee shall have the
power to cause such equitable adjustments to be made to correct such errors as
Trustee in its discretion considers appropriate. Such adjustments shall be final
and binding on all persons.
SECTION 9
RESPONSIBILITY OF TRUSTEE
9.1. General Duty of Care. Trustee shall act with the care, skill,
prudence and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of a like character and with like aims, 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, the terms of the Plan or this Trust and is
given in writing by Company. In the event of a dispute between Company and any
person, Trustee may apply to a court of competent jurisdiction to resolve the
dispute.
9.2. No Duty to Determine Taxability. Trustee has no responsibility to
advise Company as to the taxability or deductibility of contributions to or
distributions from the Trust, or gains or losses thereon, whether with regard to
any federal, state, local or other taxes, and Company acknowledges that it has
not and will not rely on Trustee for such purposes. Trustee does not warranty
and shall not be liable for any tax consequences associated with the Trust or
the Plan.
9.3. Indemnification of Trustee. Company will indemnify Trustee and hold
it harmless from and against all claims, liabilities, legal fees and expenses
that may be asserted against it, otherwise than on account of the Trustee's own
negligence or willful misconduct (as found by a final judgment of a court of
competent jurisdiction) by reason of the Trustee's taking or refraining from
taking any action in accordance with the Trust agreement, whether or not Trustee
is a party to a legal proceeding or otherwise.
9.4. Trustee May Rely on Company Information. Trustee shall be entitled to
rely on any information furnished to it by the Company or any other party from
whom the Trustee reasonably believes it is authorized to provide any information
to the Trust. Trustee shall have no duty to determine or inquire whether any
contributions to this Trust are in compliance with the Plan, or to compute any
amount to be paid to Trustee; nor shall Trustee be responsible for the
collection or adequacy of any contributions to the Trust or for the adequacy of
the Trust to meet and discharge liabilities to Participants and their
Beneficiaries under the Plan or to other creditors of the Company.
9.5. Litigation Expenses. 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.
9.6. Use of Counsel. Trustee may consult with legal counsel (who may also
be counsel for Company generally) with respect to any of its duties or
obligations hereunder.
9.7. Use of Agents. Trustee may hire such attorneys, agents and advisors
as are reasonably necessary to interpret the provisions of the Trust and this
agreement and to resolve any disputes that may arise on these issues. Trustee
may recover the reasonable costs of hiring such attorneys, agents and advisors
from the Company or, in the absence of such payment, from the Trust. Trustee
shall not be liable to anyone for any action it may take in good faith in
reliance upon the advice of such attorneys, agents and advisors.
9.8. General Grant of Authority. Trustee shall have, without exclusion, all
powers conferred on trustees by applicable law, unless expressly provided
otherwise herein.
9.9. No Business Obligation. 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 or 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 of 1986, as amended.
SECTION 10
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 11
RESIGNATION AND REMOVAL OF TRUSTEE
11.1. Resignation. Trustee may resign at any time by written notice to
Company, which shall be effective thirty (30) days after receipt of such notice
unless Company and Trustee agree otherwise.
11.2. Removal. Trustee may be removed by Company on thirty (30) days notice
or upon shorter notice accepted by Trustee.
11.3. Change in Control. Upon a Change in Control, as defined herein,
Trustee may not be removed by Company for ninety (90) days. If for any reason
Trustee resigns or is removed within ninety (90) days of a Change in Control,
Trustee shall select a successor Trustee in accordance with the provisions of
Section 12.2 hereof prior to the effective date of Trustee's resignation or
removal.
11.4. Transfer of Assets. 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 thirty (30)
days after receipt of notice of resignation, removal or transfer, unless Company
extends the time limit.
11.5. Court Appointment. If Trustee resigns or is removed, a successor
shall be appointed, in accordance with the terms hereof. 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 the proceeding shall be allowed as administrative expenses of
the Trust.
SECTION 12
APPOINTMENT OF SUCCESSOR
12.1. New Trustee. If Trustee resigns or is removed in accordance with
Section 11.1 or 11.2 hereof, the Administrator may appoint any third party, such
as a bank trust department or other party that may be granted corporate trustee
powers under Minnesota law, as a successor to replace Trustee upon resignation
or removal. The appointment shall be effective when accepted in writing by the
new Trustee, who shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former Trustee shall execute
any instrument necessary or reasonably requested by Company or the successor
Trustee to evidence the transfer.
12.2. Change in Control. Upon a Change in Control, if Trustee resigns or is
removed and selects a successor Trustee pursuant to Section 11.3, Trustee may
appoint any third party such as a bank trust department or other party that may
be granted corporate trustee powers under Minnesota law. 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 the Trust assets. The former Trustee
shall execute any instrument necessary or reasonably requested by Company or the
successor Trustee to evidence the transfer.
SECTION 13
AMENDMENT OR TERMINATION
13.1. 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 2.3
13.2. The Trust shall not terminate until the date on which Plan
Participants and their Beneficiaries are no longer entitled to benefits pursuant
to the terms of the Plan unless sooner revoked in accordance with Section 2.3.
Upon termination of the Trust any assets remaining in the Trust shall be
returned to the Company.
13.3. Upon written approval of Participants or Beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan, Company may terminate
this Trust prior to the time all benefit payments under the Plan have been made.
All assets in the Trust at termination shall be returned to the Company.
SECTION 14
MISCELLANEOUS
14.1. Separability. 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.
14.2. Spendthrift Provision. Benefits payable to Participants and
Beneficiaries under this Trust Agreement may not be anticipated, assigned
(either at law or in equity), alienated, pledges, encumbered or subjected to
attachment, garnishment, levy, execution or other legal or equitable process.
SECTION 15
EFFECTIVE DATE
The effective date of this Trust Agreement shall be September 30, 1997.
IN WITNESS WHEREOF, each of the parties hereto has caused this Trust
Agreement to be executed as of the day and year first above written.
GRACO INC.
By:/s/Xxxx X. Xxxxxxx
Its: Treasurer
And:/s/Xxxxxx X. Xxxxxxxx
Its: Vice President, General Counsel
and Secretary
NORWEST BANK MINNESOTA, N.A.
as TRUSTEE
By:/s/Xxxxxx X. Xxxxxx
Its: Vice President
And:/s/Xxxxx X. Xxxxxxxxx
Its: Vice President
