Exhibit 10.26
TRUST AGREEMENT
This Trust Agreement made as of April 17, 1998, by and between Xxxx, Xxxxxx
& Associates, Inc., a Delaware corporation (hereinafter called "Company"), and
First American Trust Company, a financial institution organized and existing
under the laws of the State of California (hereinafter called "Trustee").
WITNESSETH:
WHEREAS, certain executives of the Company participate in the Xxxx, Xxxxxx
& Associates, Inc. Deferred Compensation Plan (the "Plan") pursuant to which
such individuals (the "Participants") have the opportunity to defer payment of
their salary and bonuses each year.
WHEREAS, it is anticipated that substantial amounts of compensation will be
deferred under the Plan and the accumulation of such deferred compensation will
represent a significant liability of the Company.
WHEREAS, the Company will establish an account or accounts for each
Participant on its books and records to which there will be credited the amount
of compensation such individual defers under the Plan plus any special
contributions made by the Company under the Plan, together with the investment
return to which such individual is entitled on the deferred sum.
WHEREAS, the deferred amounts plus any special contributions made by the
Company under the Plan and any investment return on such amounts are to be paid
to the Participant at such time or times (the "Deferred Payments") as the
Participant has specified in his or her election forms under the Plan.
WHEREAS, the Company deems it advisable to establish an irrevocable trust
to which the Company shall transfer assets from time to time in order to
accumulate resources from which the Deferred Payments shall be made as they
become due under the Plan.
RESOLVED, that the parties hereby establish this Trust to which the Company
shall transfer assets from time to time for the purpose of accumulating
resources to satisfy, in whole or in part, its liability for the Deferred
Payments under the Plan. The assets so transferred, together with all income
and earnings thereon and all increments thereto, shall constitute the Trust
Fund, and the Trustee shall hold the Trust Fund for the uses and purposes and
upon the terms and conditions of this Trust Agreement.
ARTICLE I
THE TRUST FUND
1.1 The Company hereby deposits in trust with the Trustee the principal
sum of Five Hundred Dollars ($500.00) to comprise the initial Trust Fund. Such
Trust Fund shall be held, administered, managed and distributed by the Trustee
in accordance with the provisions of this Trust Agreement. From time to time
during the term of the Trust, the Company shall deposit additional sums with the
Trustee to be held as part of the Trust Fund hereunder for the uses and
purposes specified herein. Such additional deposits shall be made at such
times and in such amounts as the Company's Board of Directors (the "Board")
shall deem appropriate in its sole discretion, and the Trustee shall have no
responsibility or obligation to compute or collect any contributions or other
deposits to be made by the Company to the Trust Fund.
1.2 Any and all contributions made by the Company to the Trust Fund shall
be paid over to the Trustee in cash or in any other form of property acceptable
to the Trustee. All contributions so received, together with all income and
earnings thereon and all increments thereto, shall constitute the Trust Fund.
1.3 The Trustee shall have the exclusive authority to control and manage
the assets of the Trust Fund in accordance with the provisions of Article IV and
shall manage and administer the Trust Fund without distinction between principal
and income and without liability for the payment of interest thereon. The
Trustee shall not be responsible in any way for the operation and administration
of the Plan. All responsibility and authority for the operation and
administration of the Plan shall be vested exclusively with a committee (the
"Plan Administrator") appointed by, and serving at the pleasure of, the Board.
1.4 The Trust hereby established shall be irrevocable and shall be
administered as a grantor trust of the Company pursuant to the provisions of
Sections 671 and 677 of the Internal Revenue Code of 1986, as amended (the
"Code").
1.5 The Trust Fund shall at all times be held by the Trustee as property
separate and apart from all other assets and funds of the Company. The Trust
Fund shall be used exclusively for the purpose of effecting the Deferred
Payments in accordance with the provisions of this Trust Agreement and in
defraying the reasonable expenses and costs incurred by the Trustee in the
administration of the Trust Fund, until all the Deferred Payments which are to
be effected pursuant to this Trust Agreement shall have been made; provided,
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however, that the Trust Fund shall at all times be subject to the claims of the
Company's general creditors pursuant to the provisions of Article III. The
Company, however, shall be reduced only to the extent one or more Deferred
Payments are actually made from the Trust Fund.
1.6 The Company's obligation to make the Deferred Payments pursuant to the
Plan shall at all times remain an unfunded and unsecured contractual obligation,
and no Participant shall have any preferred or senior claim or beneficial
ownership interest in or to any assets of the Trust Fund. Any right the
Participant may have to receive one or more Deferred Payments shall be that of
an unsecured creditor of the Company.
ARTICLE II
DEFERRED PAYMENTS
2.1 Provided the Company is not at the time Insolvent (within the meaning
of Section 4.1), the Trustee shall from time to time, upon the written
directives of the Plan Administrator, distribute from the Trust Fund one or more
Deferred Payments due under the Plan to such individuals, in such amounts and at
such times as may be specified in the directives. Each distribution so made
shall be deducted from and charged against the Trust Account of the Participant
to whom the Deferred Payment is distributed.
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2.2 The Trustee shall be obligated to make the Deferred Payments out of
the Trust Fund in accordance with the most recent payment schedule in effect for
each Participant, provided the Company is not otherwise at the time Insolvent.
Each such Deferred Payment shall be adjusted for additional investment earnings
to which the Participant may become entitled under the Plan for the period prior
to payment, and the amount of such Deferred Payment shall, upon distribution by
the Trustee, be deducted from and charged against the Participant's Trust
Account.
2.3 The Trustee shall incur no liability for making any distribution in
accordance with directives received pursuant to the provisions of Section 3.1 or
Section 3.2 and shall be under no duty to make inquiry as to whether any
distribution effected in accordance with such directives is made pursuant to the
provisions of the Plan. The Trustee shall not be liable for the proper
application of any part of the Trust Fund to the extent distributions are made
in accordance with Section 3.1 or Section 3.2, nor shall the Trustee be
responsible for the adequacy of the Trust Fund to meet and discharge the
obligations and liabilities of the Company under the Plan.
2.4 The Trustee shall be responsible for the collection of all federal and
state income tax withholding requirements applicable to each distribution,
provided the Plan Administrator furnishes the Trustee with information about
each Participant that is necessary for calculating the amount of the withholding
taxes.
2.5 The Trustee may make any distributions required to be made hereunder
by mailing a check for the amount thereof to the person to whom such
distribution is to be made at such address as may have last been furnished to
the Trustee, or if no such address shall have been so furnished, to such person
in care of the Company at its principal office.
2.6 Should the Trustee determine that the individual Trust Accounts
maintained for one or more Participants do not at the time have a sufficient
balance to make all the Deferred Payments then due and payable to such
Participants, then the Trustee shall nevertheless make the Deferred Payments to
one or more of such participants to the extent there are sufficient assets in
each of their individual Trust Accounts and shall promptly notify the Plan
Administrator of any existing deficiency. The Company shall correct the
specified deficiency by making payments out of its general assets to each
affected Participant.
2.7 Should it be determined, whether by final decision of a court of
competent jurisdiction or by closing agreement under Code Section 7121 between
the Internal Revenue Service and the Participant, that the Participant will, by
reason of his or her interest in the Plan, recognize taxable income under the
federal tax laws before the date the corresponding Deferred Payment or Payments
would otherwise be made to such Participant pursuant to the Plan, the Plan
Administrator shall thereupon provide written directives to the Trustee to
distribute out of the Trust Account maintained for such Participant, as soon as
administratively feasible, whichever of the following amounts the Plan
Administrator in its sole discretion deems appropriate under the circumstances:
(i) an amount equal to the federal, state and local income tax
liability incurred by the Participant with respect to such taxable income, or
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(ii) one or more Deferred Payments equal to the full amount of such
taxable income.
2.8 Should the Company receive an opinion of counsel, in form and
substance satisfactory to the Plan Administrator, that:
(i) on the basis of a published regulation, ruling or other general
announcement of the Internal Revenue Service, the existence of the Trust Fund
will result in the immediate recognition of taxable income by the individuals
for whom the Trust Accounts are maintained hereunder, or
(ii) on the basis of a published regulation or other general
announcement or advisory opinion of the U.S. Department of Labor, the existence
of the Trust Fund will result in the characterization of the Plan as a funded
employee pension plan under Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"),
then the Trust shall immediately terminate and the Plan Administrator
shall thereupon provide written directives to the Trustee to liquidate the
assets of the Trust Fund to the extent necessary to distribute to each
Participant, as soon as administratively feasible, sufficient cash proceeds to
effect payment of whichever of the following amounts the Plan Administrator in
its sole discretion deems appropriate under the circumstances:
(A) the amount necessary to satisfy the federal, state and local
income tax liability incurred by the Participant with respect to his or her
Trust Account, or
(B) the amount necessary to pay off the entire balance then
outstanding in such Participant's Trust Account.
Such distribution shall be made notwithstanding any payment elections to
the contrary that the Participants may otherwise have outstanding under the
Plan. Any remaining proceeds of the Trust Fund shall then be paid to the
Company.
ARTICLE III
COMPANY INSOLVENCY
3.1 The Company shall be considered "Insolvent" for purposes of this Trust
Agreement if:
(i) The Company shall (A) admit in writing its inability to pay its
debts generally as they become due, (B) commence voluntary proceedings under any
applicable bankruptcy, insolvency or other debtor-relief law now or hereafter in
effect, (C) make a general assignment of its assets for the benefit of its
creditors, (D) consent to the appointment of a receiver for itself or any
substantial part of its property, (E) consent to the relief sought in any
involuntary proceedings under any applicable bankruptcy, insolvency or other
debtor-relief law now or hereafter in effect or (F) take corporate action in
furtherance of any of the aforesaid purposes; or
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(ii) There shall be entered by a court of competent jurisdiction any
order, decree or other for relief with respect to the Company: (A) in any
involuntary proceedings against the Company under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or (B) appointing,
without the consent of the Company, a receiver for the Company or any
substantial portion of its property, or (C) approving the commencement of
involuntary proceedings filed against the Company under any applicable law now
or hereafter in effect seeking the winding-up or liquidation of the Company, and
in any such instance the order or decree so entered shall not be vacated or set
aside or stayed within sixty (60) days after the date of entry thereof.
3.2 At all times during the term of this Trust, the Trust Fund shall be
subject to claims of the general creditors of the Company as hereinafter set
forth. At any time the Trustee has actual knowledge (or otherwise determines)
that the Company is Insolvent, the Trustee shall cease all further Deferred
Payments to Participants and shall thereafter hold the Trust Fund solely and
exclusively for distribution in payment and satisfaction of any and all claims
of the Company's creditors as a court of competent jurisdiction may direct.
3.3 The Company's Chief Financial Officer and the Board shall each have
the affirmative duty to provide immediate written notice to the Trustee in the
event the Company should become Insolvent. Should the Chief Financial Officer
or the Board provide such written notice to the Trustee, or should one or more
creditors of the Company allege in writing to the Trustee that the Company has
become Insolvent, then the Trustee shall, within thirty (30) days after receipt
of such notice or allegation, make an independent determination as to whether
the Company is in fact Insolvent. Pending such determination, the Trustee (i)
shall make no further Deferred Payments to Participants under the Plan, (ii)
shall hold the Trust Fund for the benefit of the Company's creditors and (iii)
shall not resume Deferred Payments to Participants in accordance with Article II
of this Trust Agreement until such time (if ever) as (A) the Trustee determines
that the Company is not Insolvent (or that the Company is no longer Insolvent,
if the Trustee initially determines the Company to be Insolvent) or (B) the
Trustee is ordered to make the Deferred Payments by a court of competent
jurisdiction.
3.4 Unless the Trustee has actual knowledge that the Company is Insolvent,
the Trustee shall have no duty to inquire whether the Company is Insolvent or to
make any independent investigation thereof. The Trustee may in all events rely
on such available evidence concerning the Company's solvency and financial
condition as may provide the Trustee with a reasonable basis for determining the
Company's solvency.
3.5 Nothing in this Trust Agreement shall adversely affect or in any
manner diminish the rights of any Participant to pursue his or her rights as a
general creditor of the Company with respect to all amounts credited to his or
her book account or accounts under the Plan.
3.6 Should the Trustee discontinue the distribution of Deferred Payments
out of the Trust Fund to one or more Participants pursuant to Section 4.3 and
subsequently determine, upon a finding that the company is not (or is no longer)
Insolvent, that Deferred Payments should subsequently be resumed, then the first
Deferred Payment to each of the affected Participants that is made out of the
Trust Fund after such period of discontinuance shall be an amount equal to the
difference between (i) the aggregate Deferred Payments that would have otherwise
been
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distributed out of the Trust Fund to such Participant (together with any
investment return on the unpaid amount to which the Participant is entitled
under the Plan) had there been no such discontinuance and (ii) the aggregate
Deferred Payments (if any) paid to the Participant out of the Company's
general assets during such period of discontinuance in lieu of the
distributions provided for hereunder. The Trustee shall be entitled to assume
that no such payments were made by the Company unless, prior to making the
payment hereunder, the Trustee receives a written certification from the Plan
Administrator, in which there is specified the amount of Deferred Payments
made to each Participant by the Company during the period of discontinuance.
ARTICLE IV
TRUSTEE POWERS
4.1 Except to the extent the Plan Administrator provides written
directives to the Trustee to purchase or sell specific investment assets that
are to serve as the measure of the investment return on one or more Trust
Accounts, the Trustee shall have the exclusive authority and responsibility to
invest and reinvest the assets of the Trust Fund in accordance with the general
investment guidelines provided from time to time in writing by the Plan
Administrator (the "Investment Guidelines").
4.2 To the extent the Plan Administrator provides specific directives for
the purchase or sale of Trust assets, the Trustee shall effect the directed
transactions and shall not incur any liability as a result of its compliance
with such directives. The Trustee may invest and reinvest all remaining Trust
assets in accordance with the Investment Guidelines and may rely on such
guidelines until written notice to the contrary is provided by the Plan
Administrator.
4.3 Upon receipt of any cash contributions from the Company that are to be
invested in specific investment assets in accordance with the Plan
Administrator's directives, the Trustee may, for a reasonable period, hold such
contributions in interest-bearing accounts until sufficient amounts are
accumulated to purchase one or more full units of the particular asset or
security designated by the Plan Administrator in its investment directives.
4.4 With respect to Trust assets that are to be invested in accordance
with the Investment Guidelines, the Trustee may invest or reinvest all or any
specified portion thereof in any Trustee-administered commingled or collective
trust fund with the same general investment objectives, and the instruments
under which any such commingled or collective fund has been established shall be
incorporated into this Trust Agreement and made a part hereof. In no event,
however, may any assets of the Trust Fund be invested or reinvested in stocks,
securities or debt instruments issued by the Company or any parent or subsidiary
company (as determined pursuant to the provisions of Code Section 424).
4.5 Subject to (i) the express obligations of the Trustee under this Trust
Agreement and (ii) any specific investment directives provided by the Plan
Administrator, the Trustee shall have all the rights, powers and privileges of
an absolute owner when dealing with the assets of the Trust Fund, including
(without limitation) full power and authority:
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(i) to hold, manage, improve, repair and control all property of
the Trust Fund, real or personal; and to sell, convey, transfer, exchange,
partition, lease, or otherwise dispose of the same from time to time in such
manner, for such consideration and upon such terms and conditions, including
credit, as the Trustee shall determine in its discretion;
(ii) to purchase (or subscribe for) and retain any securities or
other property, including life insurance policies, and to establish margin
accounts in connection therewith to the extent applicable;
(iii) to exercise any option, conversion privilege or subscription
right given the Trustee as the owner of any security held in the Trust Fund; to
exercise any and all voting rights upon any stocks, bonds or other securities;
to give general or special proxies or powers of attorney with or without power
of substitution; to oppose, or to consent to, or otherwise participate in,
corporate reorganizations or other changes affecting corporate securities, and
to delegate discretionary powers, and to pay any assessments or charges in
connection therewith; and generally to exercise any of the powers of an owner
with respect to stocks, bonds, securities or other property comprising the Trust
Fund;
(iv) to commence or defend legal or administrative proceedings,
and to compromise, arbitrate, or settle claims, debts or damages in favor of
or against the Trust and to deliver or accept, in either total or partial
satisfaction of any indebtedness or other obligation, any property, and to
continue to hold for such period of time as the Trustee may deem appropriate
any property so received, and to pay all costs and reasonable attorney fees in
connection therewith out of the assets of the Trust Fund;
(v) to foreclose any obligation by judicial proceeding or
otherwise;
(vi) to deposit any securities held in the Trust Fund with a
securities depository;
(vii) to invest assets of the Trust Fund in time deposits or savings
accounts bearing a reasonable rate of interest; to invest in Treasury Bills and
other forms of United States government obligations; to deposit monies in
federally insured savings accounts or certificates of deposit in banks or
savings and loan associations;
(viii) to sell, purchase or acquire put or call options that are
traded on and purchased through a national securities exchange registered under
the Securities Exchange Act of 1934, as amended, or, if not so traded, that are
guaranteed by a member firm of the New York Stock Exchange;
(ix) to cause any securities to be registered - whether or not
required by federal or California state statute - and to carry any such
securities in the name of a nominee or nominees; and
(x) to make, execute, acknowledge and deliver any and all
documents of transfer and conveyance and any and all other instruments that
may be necessary or appropriate to carry out the powers herein granted.
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4.6 The Trustee shall at all times act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent man 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.
4.7 The Trustee shall not incur liability to any person for any action
taken pursuant to a direction, request or approval given by the Company which is
contemplated by, and in conformity with, the terms of the Plan or this Trust
Agreement and is given in writing by the Company. In the event of a dispute
between the Company and a party, the Trustee may apply to a court of competent
jurisdiction to resolve the dispute.
4.8 The Trustee shall be fully protected in acting upon any instruction,
directive or document believed by the Trustee to be genuine and to be presented
or signed by the person or persons duly authorized to do so, and the Trustee
shall be under no duty to make any investigation or inquiry as to the
authenticity of such instruction or document.
4.9 The Trustee may consult with legal counsel of the Trustee's choice,
including counsel for the Company, upon any question or matter arising hereunder
and shall be fully protected in acting in good faith upon the advice of such
counsel.
4.10 If the Trustee has knowledge that any directive of the Company or the
Plan Administrator constitutes a breach of the Company's or the Plan
Administrator's obligations under the provisions of the Plan or this Trust
Agreement, then the Trustee shall not be obligated to follow such directive and
shall have full power and authority to take such remedial action as the Trustee
deems necessary.
4.11 The Trustee shall be responsible solely for its own acts, or
omissions and shall not incur any liability for a breach of duty by the Company
or the Plan Administrator under the Plan or this Trust Agreement, unless the
Trustee participates knowingly in such breach, knowingly undertakes to conceal
such breach, has actual knowledge of such breach and fails to take reasonable
action to remedy such breach or, through its own negligence in performing its
fiduciary responsibilities with respect to the Trust Fund, has enabled the
Company or the Plan Administrator to commit a breach of the latter's duties or
responsibilities under the Plan or this Trust Agreement.
4.12 To the extent the Plan Administrator fails to furnish investment or
reinvestment directives or other investment guidelines after the Trustee has
requested instruction, then the Trustee may, in the absence of such directives
or guidelines, either (i) take such affirmative action as the Trustee deems
appropriate and proper for the Trust Fund or (ii) refuse to take any action with
respect to the investment or reinvestment of the Trust Fund. In such latter
event, the Trustee shall not incur any liability for its inaction, unless the
conduct of the Trustee in the matter otherwise renders the Trustee liable under
Section 5.10 for any breach of duty by the Company or the Plan Administrator.
4.13 The Trustee shall have no obligation to institute legal proceedings,
or to defend against any claim or action, arising from or relating to the Trust
Fund or any transactions or distributions effected thereunder, unless the
Trustee is provided with adequate assurances of indemnification from the Company
against any and all loss, cost, liability or expense associated
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therewith, and the Company hereby agrees to provide such indemnification as
and when such expenses are incurred; provided, however, that such
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indemnification shall not extend to any settlement agreement entered into by
the Trustee without the prior written consent of the Plan Administrator.
4.14 The Trustee may hire agents, accountants, actuaries and financial
consultants for purposes of obtaining assistance in the performance of its
duties and responsibilities hereunder, including (without limitation) any
determination of the Company's Insolvency, and may pay the reasonable
compensation and expenses of such individuals out of the assets of the Trust
Fund, unless paid by the Company within forty-five (45) days after receipt of
the written xxxx.
ARTICLE V
REACQUISITION/REVERSION
5.1 The Company shall have no right, power or authority to direct the
Trustee to return to the Company (or otherwise divert to third parties other
than general creditors of the Company who become entitled to payments hereunder
in accordance with Article III) any assets of the Trust Fund prior to the
distribution of all Deferred Payments due Participants under the Plan. Should
the Trustee determine, on the basis of written documentation provided by the
Plan Administrator, that the assets of the Trust Fund exceed the Company's
aggregate liability for all Deferred Payments due participants under the Plan,
such excess assets shall, upon the Company's written request, be returned to the
Company. In no event, however, will any such determination of excess assets be
made, nor any portion of the Trust Fund be returned to the Company, at a time
when Participants are still permitted to make deferral elections under the Plan
with respect to future salary or bonus payments.
ARTICLE VI
ACCOUNTING
6.1 The Trustee shall maintain accurate records and detailed accounts of
all investments, receipts, distributions, disbursements and other transactions
hereunder upon a calendar year basis, and such records shall be available at all
reasonable times for inspection by the Plan Administrator, the Company's Chief
Financial Officer or any other authorized representative of the Company.
6.2 The Trustee shall, at the direction of the Plan Administrator, submit
to the Plan Administrator such valuations, reports or other information as the
Plan Administrator may reasonably require. The Trust Fund shall be valued by
the Trustee at least quarterly at fair market value as of the close of business
on the last business day of each calendar quarter. In the absence of fraud or
bad faith, the valuation of the Trust Fund by the Trustee shall be conclusive.
In connection with each such periodic valuation, the Trustee shall, as of
the close of such period, render to the Plan Administrator a separate account
and report of the individual assets and liabilities of the Trust Fund and the
income, gain, losses and expenses of each investment asset maintained from time
to time as part of the Trust Fund. Such report shall also include all expenses
and charges incurred by the Trustee in acquiring each investment asset directed
by the
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Plan Administrator (including purchase price, brokerage fees, commissions and
other front-end charges) and all proceeds realized by the Trustee in
liquidating each investment asset as directed by the Plan Administrator,
together with all taxes, costs and expenses incurred in connection with such
liquidation.
6.3 Within sixty (60) days following the close of each calendar year or
following the close of any other period as may be agreed upon by the Trustee and
the Plan Administrator, the Trustee shall file with the Plan Administrator a
written account setting forth a description of all securities and other property
purchased and sold (including the purchase price or sale proceeds and related
fees and expenses), all receipts, distributions, disbursements and other
transactions effected by the Trustee during such calendar year or other
designated period, and listing the individual securities and other assets held
by the Trustee at the end of such calendar year or other designated period,
together with the then fair market value thereof.
The Plan Administrator may approve such account by written notice of
approval delivered to the Trustee, or by failure to deliver to the Trustee
express written objections to such account, within sixty (60) days from the date
on which the account is delivered to the Plan Administrator.
Upon the Trustee's receipt of written approval of the account or upon the
Plan Administrator's failure to deliver to the Trustee written objections to the
account prior to the expiration of the sixty (60) day period within which such
objections may be filed, such account shall be deemed to be approved, and the
Trustee shall be released and discharged from liability and accountability to
the Company with respect to all items, matters and transactions set forth in
such account, as if such account had been settled and allowed by a decree of a
court of competent jurisdiction to which the Trustee and the Company were
parties.
6.4 Should the Trustee determine that the Trust Fund consists in whole or
in part of property not traded freely on a recognized market or that information
necessary to ascertain the fair market value thereof is not readily available to
the Trustee, then the Trustee shall request the Plan Administrator to instruct
the Trustee as to the value of such property for purposes of this Trust
Agreement, and the Plan Administrator shall promptly comply with such request.
The Trustee shall be entitled to rely upon the value placed upon such property
by the Plan Administrator in its instructions to the Trustee. Should the Plan
Administrator fail or refuse to instruct the Trustee as to the value of such
property within a reasonable time after receipt of the request of the Trustee to
do so, the Trustee may in its sole discretion engage a competent appraiser to
determine the fair market value of such property for all purposes hereunder.
The valuation determined by such appraiser shall be binding on all parties who
have an interest in the Trust Fund, and the cost of such appraisal shall be paid
by the Trustee out of the Trust Fund, unless paid by the Company within forty-
five (45) days after receipt of the written xxxx.
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ARTICLE VII
COMPENSATION AND EXPENSES
7.1 The Trustee shall pay from the Trust Fund all costs and fees incurred
in the acquisition of Trust Fund investments (including the purchase price,
fees, commissions and other front-end charges). The Trustee shall, upon the
written direction of the Company's Chief Financial Officer, pay all federal,
state and local income taxes incurred by the Company in connection with the
income and earnings of the assets held in the Trust Fund, and such taxes shall
accordingly be deducted from and charged against the Trust Fund. To the extent
such costs, fees and taxes relate to specific investment assets that measure the
investment return on one or more Trust Accounts, such charges against the Trust
Fund shall be deducted specifically from such Trust Accounts.
7.2 Reasonable expenses incurred in the administration of the Trust
(including counsel, appraisal and accounting fees) may be paid out of the Trust
Fund, unless paid by the Company within forty-five (45) days after receipt of
the written xxxx.
7.3 Brokerage commissions, transfer taxes and other charges and expenses
realized or incurred in connection with the sale or other liquidation of stocks,
securities and other property by the Trust shall be paid out of the Trust Fund.
The Trustee shall, upon the written direction of the Company's Chief Financial
Officer, pay all federal, state and local income taxes incurred by the Company
in connection with any gain recognized upon the liquidation or sale of Trust
Fund assets, and such taxes shall accordingly be deducted from and charged
against the Trust Fund. To the extent such charges, expenses and taxes relate
to specific investment assets that measure the investment return on one or more
Trust Accounts, such charges against the Trust Fund shall be deducted
specifically from such Trust Accounts.
7.4 The Trustee shall be entitled to reasonable fees for services
rendered. Any fees to which the Trustee may become entitled hereunder shall be
paid out of the Trust Fund, unless paid by the Company within forty-five (45)
days after receipt of the written xxxx.
ARTICLE VIII
RESIGNATION OR REMOVAL
8.1 The Trustee may resign as Trustee hereunder or may be removed by the
Plan Administrator. Such resignation or removal may be accomplished at any time
upon the giving of thirty (30) days advance written notice, unless waived. The
Plan Administrator may appoint a successor Trustee at any time, and such Trustee
shall thereupon succeed to all the powers and duties given to the Trustee by
this Trust Agreement, and there shall be transferred to such successor Trustee
all right, title and interest in and to the property then held in the Trust
Fund. However, a reasonable sum of money may be reserved for payment of the
expenses incurred in connection with the settlement of accounts upon the
resignation or removal of the Trustee, and any balance of such reserve remaining
after the payment of such expenses shall be paid over to the successor Trustee
as part of the Trust fund.
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8.2 Within sixty (60) days after the resignation or removal of the
Trustee, the resigning or removed Trustee shall render to the Plan Administrator
an account in the form and manner prescribed for the annual account in
accordance with Section 7.3 hereof. Unless the Plan Administrator shall, within
sixty (60) days after the rendition of such account, file with the Trustee
written objections thereto, the account shall be deemed to have been approved,
and the resigning or removed Trustee shall be released and discharged from
liability and accountability to the Company with respect to all items, matters
and transactions set forth in such account, as if such account had been settled
and allowed by a decree of a court of competent jurisdiction to which the
Trustee and the Company were parties.
8.3 Any successor Trustee appointed under this Trust shall not incur any
liability by reason of, or have any duty or responsibility tot inquire into or
undertake any action with respect tot, any acts performed or omitted to be
performed under this Trust by any predecessor Trustee.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 This Trust Agreement may be amended at any time and to any extent by a
written instrument executed by the Trustee and the Company; provided, however,
that no such amendment shall make this Trust revocable by the Company.
9.2 The Trust shall terminate at such time as all existing assets of the
Trust Fund shall have been applied to the payment and satisfaction of (i) the
claims of the Company's creditors pursuant to the provisions of Section 4.2 and
(ii) all compensation and expense reimbursements to which the Trustee is
entitled hereunder.
9.3 Unless sooner terminated under Section 10.2, the Trust shall in all
events terminate at such time as (i) all deferrals of compensation under the
Plan shall have ceased and (ii) all Deferred Payments due Participants under the
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Plan shall have been paid in full, with the result that there shall not at such
time be any outstanding balance in the deferred compensation accounts maintained
on the books of the Company for Participants in the Plan.
9.4 Upon termination of the Trust as provided in Section 10.3, any assets
remaining in the Trust Fund shall be returned to the Company.
ARTICLE X
MISCELLANEOUS
10.1 The Trust shall be administered in the State of California, and its
validity, construction and all rights hereunder shall be governed by the laws of
California, except to the extent preempted by ERISA. If the provisions of this
Trust Agreement and the Plan shall be inconsistent or otherwise in conflict
regarding the rights, duties or obligations of the Trustee, the provisions of
the Trust Agreement shall control. If any provisions of this Trust Agreement
shall be invalid or unenforceable, the remaining provisions thereof shall
continue to be fully effective.
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10.2 No Participant entitled to any benefit or distribution from the Trust
Fund shall have any right to assign, alienate, hypothecate or encumber his or
her interest in such benefit or distribution, and such benefit or distribution
shall not, to the full extent permitted by law, be subject to the claims of his
or her creditors or liable to attachment, execution or other process of law.
ARTICLE XI
INDEMNIFICATION
11.1 The Company shall indemnify the Trustee against, and hold the Trustee
harmless from, all liabilities and claims (including reasonable attorney fees
and expenses in defending against such liabilities and claims) against the
Trustee arising out of (a) any breach of duty by the Company or the Plan
Administrator under the Plan or this Trust Agreement, unless such Trustee
participates knowingly in such breach, knowingly undertakes to conceal such
breach, has actual knowledge of such breach and fails to take reasonable
remedial action to remedy such breach or, through its negligence in performing
its own specific fiduciary responsibilities, has enabled the Company or the Plan
Administrator to commit a breach of the latter's duties or responsibilities
under the Plan or this Trust Agreement, or (b) any breach by such Trustee in the
performance of its fiduciary duties under this Trust Agreement, unless such
latter breach arises in whole or in part from the gross negligence or willful
misconduct of such Trustee. The Trustee shall be entitled to collect on the
indemnity under this Article XI from the assets of the Trust Fund, unless the
Company provides such indemnification from its general assets within forty-five
(45) days after written demand from the Trustee.
IN WITNESS WHEREOF, the Company and the Trustee have executed this Trust
Agreement as of the date first above written.
XXXX, XXXXXX & ASSOCIATES, INC.
By:
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Title: Vice President and Chief Financial Officer
FIRST AMERICAN TRUST COMPANY, TRUSTEE
By:
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Title: Vice President
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