Exhibit 10.44
TRUST AGREEMENT
FOR THE
CAP ROCK ELECTRIC COOPERATIVE, INC.
SUPPLEMENTAL EXECUTIVE DEFERRED
COMPENSATION RETIREMENT PLAN
TABLE OF CONTENTS
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Section 1 Establishment of Trust 1
Section 2 Payments to Plan Participants and Their Beneficiaries 2
Section 3 Trustee Responsibility Regarding Payments to
Trust Beneficiary When Company Is Insolvent 3
Section 4 Payments to Company 4
Section 5 Investment Authority 4
Section 6 Disposition of Income 5
Section 7 Accounting by Trustee 5
Section 8 Responsibility of Trustee 5
Section 9 Compensation and Expenses of Trustee 6
Section 10 Resignation and Removal of Trustee 6
Section 11 Appointment of Successor 7
Section 12 Amendment or Termination 7
Section 13 Miscellaneous 7
Section 14 Effective Date 8
Adoption of Trust Agreement 9
THIS AGREEMENT, made this ____ day of _____________ by and between Cap Rock
Electric Cooperative, Inc. (the "Company") and Xxxxxxx X. Xxxxx, Xxxx X. Xxxxxx,
Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxx (the "Trustee");
WHEREAS, the Company has adopted the Cap Rock Electric Cooperative, Inc.
Supplemental Executive Deferred Compensation Retirement Plan (the "Plan"); and
WHEREAS, the Company has incurred or expects to incur liability under the
terms of the Plan with respect to the individuals participating thereunder; and
WHEREAS, the Company wishes to establish the Trust Agreement for the Cap
Rock Electric Cooperative, Inc. Supplemental Executive Deferred Compensation
Retirement Plan (the "Trust") and to contribute to the Trust assets that shall
be held herein, subject to the claims of the general creditors of the Company in
the event of its insolvency (as herein defined) until paid to participants or
their beneficiaries in such manner and at such times as specified in the Plan;
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 group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974
("ERISA");
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, IT IS AGREED, that 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) The Company hereby deposits with the Trustee in Trust $100.00 (one
hundred dollars), which shall become the principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the 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 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 the Company. Any assets held by the Trust
will be subject to the claims of the Company's general creditors under
federal and state law in the event of insolvency, as defined in Section
3(a) herein.
(e) The 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
the Trustee to augment the principal to be held, administered and disposed
of by the Trustee as provided in this Trust Agreement. Neither the Trustee
nor any Plan participant or beneficiary shall have any right to compel such
additional deposits.
Section 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) The Company shall deliver to the Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in respect of
each Plan participant (and his or her beneficiaries), that provides a
formula or other instructions acceptable to the 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, the Trustee shall make payments to the Plan
participants and their 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 the Company.
(b) The entitlement of a Plan participant or his or her
beneficiaries to benefits under the Plan shall be determined by the
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) The Company may make payment of benefits directly to Plan
participants or their beneficiaries as they become due under the terms
of the Plan. the Company shall notify the Trustee of its decision to
make payment of benefits directly 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, the Company shall
make the balance of each such payment as it falls due. The Trustee shall
notify the Company where principal and earnings are not sufficient.
Section 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST
BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) The Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is Insolvent. the
Company shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) the Company is unable to pay its debts as they become
due, or (ii) the 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 the Company under federal and
state law as set forth below.
(1) The Board of Directors and the Chief Executive Officer of
the Company shall have the duty to inform the Trustee in writing of
the Company's Insolvency. If a person claiming to be a creditor of
the Company alleges in writing to the Trustee that the Company has
become Insolvent, the Trustee shall determine whether the Company
is Insolvent and, pending
such determination, the Trustee shall discontinue payment of benefits
to Plan participants or their beneficiaries.
(2) Unless the Trustee has actual knowledge of the Company's
Insolvency, or has received notice from the Company or a person
claiming to be a creditor alleging that the Company is Insolvent,
the Trustee shall have no duty to inquire whether the Company is
Insolvent. the Trustee may in all events rely on such evidence
concerning the Company's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for
making a determination concerning the Company's solvency.
(3) If at any time the Trustee has determined that the Company
is Insolvent, the Trustee shall discontinue payments to Plan
participants or their beneficiaries and shall hold the assets of
the Trust for the benefit of the Company's general creditors.
Nothing in this Trust Agreement shall in any way diminish any
rights of Plan participants or their beneficiaries to pursue their
rights as general creditors of the Company with respect to benefits
due under the Plan or otherwise.
(4) The Trustee shall resume the payment of benefits to Plan
participants or their beneficiaries in accordance with Section 2 of
this Trust Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the 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 Plan participants or their beneficiaries under the terms
of the Plan for the period of such discontinuance, less the aggregate
amount of any payments made to Plan participants or their beneficiaries
by the 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, the Company shall have no right or power to direct the Trustee to
return to the Company or to divert to others any of the Trust assets before all
payment of benefits have
been made to Plan participants and their beneficiaries pursuant to the
terms of the Plan.
Section 5. INVESTMENT AUTHORITY.
In no event may the Trustee invest in securities (including stock
or rights to acquire stock) or obligations issued by the Company, other than
a de minimis amount held in common investment vehicles in which the Trustee
invests. All rights associated with assets of the Trust shall be exercised by
the Trustee or the person designated by the Trustee, and shall in no event be
exercisable by or rest with Plan participants.
The Company shall have the right, at anytime, and from time to time
in its sole discretion, to substitute assets of equal fair market value for
any asset held by the Trust.
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.
The 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 the Company and the Trustee. Within 60 days following the close of
each calendar year and within 30 days after the removal or resignation of the
Trustee, the Trustee shall deliver to the 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.
Section 8. RESPONSIBILITY OF TRUSTEE.
(a) The Trustee shall act with 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 the Trustee shall incur no liability to
any person for any action taken pursuant to direction, request or
approval given by the Company which is contemplated by, and in
conformity with, the terms of the Plan of this Trust 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.
(b) If the Trustee undertakes or defends any litigation arising
in connection with this Trust, the Company agrees to indemnify the
Trustee against the Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses) relating
thereto and to be primarily liable for such payments. If the Company
does not pay such costs, expenses and liabilities in a reasonably
timely manner, the Trustee may obtain payment from the Trust.
(c) The 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.
(d) The Trustee may consult with legal counsel
(who may also be counsel for the Company generally) with respect to
any of its duties or obligations hereunder.
Section 9. COMPENSATION AND EXPENSES OF TRUSTEE.
The Company shall pay all administrative and the 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) The Trustee may resign at any time by written notice to the
Company, which shall be effective 30 days after receipt of such notice
unless the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on 30 days notice
or upon shorter notice accepted by the Trustee.
(c) Upon resignation or removal of the Trustee and appointment of
a successor Trustee, all assets shall subsequently be transferred to
the successor Trustee. The transfer shall be completed within 60 days
after receipt of notice of resignation, removal or transfer, unless
the Company extends the time limit.
(d) If the 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 paragraph(s) (a) [or (b)] of this
section. If no such appointment has been made, the Trustee may apply
to a court of competent jurisdiction for appointment of a successor or
for instructions. All expenses of the Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
Section 11. APPOINTMENT OF SUCCESSOR.
(a) If the Trustee resigns [or is removed] in accordance with
Section 10(a) [or (b)] hereof, the Company may appoint any third
party, such as a bank trust department or other party that may be
granted corporate trustee powers under state law, as a successor to
replace the Trustee upon. resignation or removal. The appointment
shall be effective when accepted in writing by the new the Trustee,
who shall
have all of the rights and powers of the former the Trustee, including
ownership rights in the Trust assets. The former the Trustee shall
execute any instrument necessary or reasonably requested by the
Company or the successor Trustee to evidence the transfer.
(b) 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 Section 7 and 8 hereof. The successor Trustee shall
not be responsible for and the 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 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the 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 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 1(b) hereof" Upon termination of the Trust any
assets remaining in the Trust shall be returned to the Company.
(c) Upon written approval of participants or beneficiaries
entitled to payment of benefits pursUant to the terms of the Plan, the
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 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 participants and their 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 Texas.
Section 14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be its date of
execution.
The undersigned, acting on behalf of the Company, do hereby execute
this instrument effective this ______day of _______ 19__.
CAP ROCK ELECTRIC COOPERATIVE, INC.
By:_________________________________
Xxxxx X. Xxxxxx
Its: Chief Executive Officer
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* * * * *
The undersigned, as trustees under the Trust Agreement for the Cap Rock
Electric Cooperative, Inc. Supplemental Executive Deferred Compensation
Retirement Plan, hereby acknowledge receipt of an executed copy of the foregoing
agreement, and hereby consent thereto this ______ day of__________ 19__.
Attested by:
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Xxxxxxx X. Xxxxx
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Xxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxxx
