1
EXHIBIT (10)J
EXECUTIVE MANAGEMENT PLANS TRUST AGREEMENT
EXECUTIVE MANAGEMENT PLANS TRUST AGREEMENT (the "Trust Agreement") dated
July 19, 1995, by and between First of America Bank Corporation (the
"Company"), and Wachovia Bank of North Carolina, N.A. (the "Trustee").
WHEREAS, the Company is obligated under the plans and agreements listed on
Schedule A hereto, as such may be amended (collectively the "Plans"), to make
payments to certain of the Company's executives (the "Executives"); and
WHEREAS, for purposes of assuring that payments will not be improperly
withheld, the Company has established a trust (the Trust);
WHEREAS, the terms of the Trust provide that the Company shall fund the
Trust upon a Potential Change in Control or a Change in Control ("Required
Funding Dates"), or such other date specified by the Company's Board of
Directors ("Discretionary Funding Date")(a reference to a "Funding Date" in the
Trust Agreement shall include Required Funding Dates, Discretionary Funding
Dates and any other Funding Dates provided for by this Trust Agreement);
WHEREAS, the Trust is currently revocable unless a Potential Change in
Control or a Change in Control occurs; and
WHEREAS, the Company desires to amend and restate the Trust in order to
provide more specific funding guidelines and to provide that the Trust shall be
irrevocable at all times; and
WHEREAS, the Company also desires to appoint an independent Trustee to
have the power and responsibilities set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and for other good and valuable consideration, the parties hereto agree as
follows:
ARTICLE I.
THE PLANS
1.1 Plans. The Company Plans subject to this Trust Agreement consist of
the plans and agreements listed on Schedule A hereto, as such may be amended.
ARTICLE II.
TRUST AND THE TRUST ASSETS
2.1 Trust.
(a) Contemporaneously with the execution of this Trust Agreement,
the Company is delivering to the Trustee to be held in trust hereunder certain
insurance policies on the lives of the Executives, for which this Trust shall
be the beneficiary.
(b) Upon the occurrence of a Discretionary Funding Date, the Company
may deliver to the Trustee assets in an amount such that the total Trust assets
shall have a current market value not to exceed the Maximum Funding Amount as
hereinafter defined.
(c) Upon the occurrence of a Required Funding Date, the Company
shall deliver to the Trustee assets in the amount necessary to increase the
current market value of the total assets of the Trust to an amount equal to the
Target Funding Amount.
(d) On each June 30 and December 31 following a Required Funding
Date ("Additional Funding Dates"), the Company shall deliver to the Trustee
assets in the amount necessary to increase the current
2
market value of the Trust to an amount equal to the Target Funding
Amount. Notwithstanding the foregoing, if a Required Funding Date
occurs due to a Potential Change in Control, and a Change in Control
shall not have occurred within 18 months following the date of the
Potential Change in Control, then the contributions to the Trust by
the Company shall be determined pursuant to paragraph (b) above, until the
occurrence of another Required Funding Date.
(e) For purposes of this Trust Agreement, the term "Target Funding
Amount" shall mean as of a given date, the sum of (i) the present value of
amounts that will be required to be paid to Executives under the Plans during
the period beginning on such date and ending on the last day of the third
fiscal year of the Company that begins after such date, (ii) the present value
of liability to Executives that will be accrued but unpaid under the Plans as
of the last day of that period and (iii) the anticipated fees of the Trustee
that will be payable prior to the next Funding Date.
For purposes of this Trust Agreement, the term "Maximum Funding Amount"
shall mean as of a given date, the present value of the projected cost of the
compensation and benefit liabilities of the Plans.
The Target Funding Amount and the Maximum Funding Amount shall be
determined by a consulting firm selected by the Company (the "Consulting Firm")
as of any Funding Date, using the assumptions set forth in Schedule B to this
Trust Agreement.
(f) In order to assist the Consulting Firm in its determination of
the Target Funding Amount and to assist the Trustee in making payments from the
Trust to Executives, the Company shall deliver to the Trustee and the
Consulting Firm a schedule (the "Payment Schedule") indicating the amount
payable to each Executive pursuant to the terms and conditions of the Plans, or
providing a formula or instructions acceptable to the Trustee for determining
the amounts so payable, and the time of commencement for, and the form of,
payment of such amounts under each of the Plans. The Company shall provide an
updated Payment Schedule to the Trustee and the Consulting Firm as of each
Funding Date. Notwithstanding the foregoing, following a Change in Control of
the Company, the Independent Trustee, and any suitable advisors appointed by
the Independent Trustee, shall be responsible for preparing all Payment
Schedules.
(g) This Trust shall be irrevocable at all times, except that the
Company shall be entitled to a return of the Trust assets as provided in
Section 4.1 hereof.
(h) This Trust is intended to be a grantor trust within the meaning
of Section 671 of the Internal Revenue Code of 1986 and is to be construed
accordingly.
2.2 Trust Assets.
(a) The Trust assets shall consist of all assets delivered to the
Trustee as of any Funding Date, in whatever form held or invested as provided
herein. The Trustee shall use its good faith efforts to invest or reinvest
from time to time all or such part of the Trust assets as it believes prudent
under the circumstances (taking into account, among other things, anticipated
cash requirements for the payment of benefits under the Plans) in any one or a
combination of the following:
(i) Cash or cash equivalents;
(ii) investments in direct obligations of the United States of
America or agencies of the United States of America or
obligations unconditionally and fully guaranteed as to
principal and interest by the United States of America, in
each case maturing within one year or less from the date of
acquisition;
(iii) investments in negotiable certificates of deposit (in each
case maturing within one year or less from the date of
acquisition) issued by a
3
commercial bank organized and existing under the laws of
the United States of America or any state thereof having a
combined capital and surplus of at least $100,000,000;
(iv) investments in insured money market accounts and other
insured deposits; or
(v) investments in mutual funds or other indirect investment
programs substantially all of whose assets consist of any
one or more of the foregoing types of investments;
provided, however, that the Trustee shall not be liable for any
failure to maximize the income earned on that portion of Trust assets
as is from time to time invested or reinvested as set forth above, nor for any
loss of income due to liquidation of any investment which the Trustee, in its
sole discretion, believes necessary to make payments or to reimburse expenses
under the terms of this Trust.
Notwithstanding the foregoing, the Company may direct the Trustee to
purchase or contribute to the Trust life insurance policies pursuant to which
the insured individuals are the Executives and the beneficiary is the Company
or the Trust. The value of such policies shall not exceed the present value of
the projected cost of the compensation and benefit liabilities of the Plans, as
determined pursuant to the guidelines established by Banking Circular 249,
issued by the Comptroller of the Currency. The Trustee shall not be liable for
Trust assets invested in such contracts.
(b) All interest and other income earned on the investment of Trust
assets shall be reinvested in accordance with sub-section (a) above.
(c) All losses of income or principal in respect of, and expenses
(including, as provided in Sections 5.1(f) and 5.1(g) hereof, any expenses of
the Trustee) charged against, the Trust assets shall be for the account of the
Company and the Company shall be obligated to promptly reimburse the Trust for
any loss in principal amount of, or expense charged against, the Trust except
to the extent that the current market value of Trust assets remaining after
such losses or expenses equals or exceeds the Target Funding Amount.
ARTICLE III.
CHANGE IN CONTROL
3.1 Definition of Change in Control. For purposes of this Trust, a
Change in Control of the Company shall have occurred:
(i) on the fifth day preceding the scheduled expiration date of a tender
offer by, or exchange offer by any corporation, person, other entity or
group (other than the Company or any of its wholly owned subsidiaries), to
acquire Voting Stock of the Company if:
(a) after giving effect to such offer such corporation, person other
entity or group would own twenty-five percent (25%) or more of the
Voting Stock of the Company,
(b) there shall have been filed documents with the Securities and
Exchange Commission ("SEC") in connection therewith (or, if no such
filling is required, public evidence that the offer has already
commenced), and
(c) such corporation, person, other entity or group has secured all
required regulatory approvals to own or control twenty-five percent
(25%) or more of the Voting Stock of the Company,
(ii) if the shareholders of the Company approve a definitive agreement to
merge or consolidate the Company with or into another corporation in a
transaction in which neither the Company nor any of its wholly owned
subsidiaries will be the surviving corporation, or to sell or otherwise
dispose of all or
4
substantially all of the Company's assets to any corporation, person,
other entity or group (other than the Company or any of its wholly owned
subsidiaries), and such definitive agreement is consummated;
(iii) if any corporation, person, other entity or group (other than the
Company or any of its wholly owned subsidiaries) becomes the Beneficial
Owner of stock representing twenty-five percent (25%) or more of the
Voting Stock of the Company, or
(iv) if during any period of two (2) consecutive years Continuing
Directors cease to comprise a majority of the Company's Board of
Directors.
For purposes of this Trust, the term "Continuing Director" means:
(i) any member of the Board of Directors of the Company who was a member
of the Board of Directors of the Company at the beginning of any period of
two (2) consecutive years, and
(ii) any person who subsequently becomes a member of the Board of
Directors of the Company, if:
(a) such person's nomination for election or election to the Board of
Directors of the Company is recommended or approved by resolution of
a majority of the Continuing Directors, or
(b) such person is included as a nominee in a proxy statement of the
Company distributed when a majority of the Board of Directors of the
Company consists of Continuing Directors.
For purposes of this Trust, the term "Voting Stock" means those shares of
the Company entitled to vote generally in the election of directors.
Upon the approval or direction of the Chairman of the Board, Chief
Executive Officer or the President of the Company and any member of the Board
of Directors then serving as an active member of the Company's Nominating and
Compensation Committee, the Company shall promptly notify the Trustee in
writing of the occurrence of any Change in Control of the Company. The date of
such Change in Control shall be a Required Funding Date under this Trust.
3.1 Definition of a Potential Change in Control. For purposes of this
Trust, a Potential Change in Control of the Company shall have occurred if:
(i) the Company enters into any agreement, which, if consummated, would
result in the occurrence of a Change in Control of the Company,
(ii) any corporation, person, other entity or group (including, without
limitation, the Company) publicly announces an intention to take actions
which if consummated would result in a Change in Control of the Company,
(iii) any corporation, person, other entity or group (other than the
Company or any of its wholly owned subsidiaries) becomes the Beneficial
Owner, as defined in Section 3.4 hereof, of stock representing five
percent (5%) or more of the Voting Stock of the Company, or
(iv) the Board of Directors of the Company adopts a resolution to the
effect that a Potential Change in Control has occurred.
Upon the approval or direction of the Chairman of the Board, Chief
Executive Officer or the President of the Company and any member of the Board
of Directors who is then serving as an active member of the Company's
Nominating and Compensation Committee, the Company shall promptly notify the
Trustee in writing of the occurrence of any Potential Change in Control of the
Company. The date of such Potential Change in Control shall be a Required
Funding Date under the Trust.
5
3.3 Additional Funding Dates. The Board of Directors of the Company may
in its sole discretion elect to pay to the Trustee any additional amounts of
cash or other property at any time. The date of such payment pursuant to such
election shall be a Discretionary Funding Date under this Trust.
3.4 Definition of Beneficial Owner. Solely for purposes of determining
the definition of the term Beneficial Owner as used in this Trust, such term
shall include any corporation, person, other entity or group (other than the
Company or any of its wholly owned subsidiaries, and other than any employee
benefit plan maintained by the Company) who is a Beneficial Owner as that term
is defined in the Company's Articles of Incorporation as amended.
ARTICLE IV
RELEASE OF THE TRUST ASSETS
4.1 Delivery to the Company.
The Company shall only be entitled to a return of Trust assets upon
the termination of the Trust as provided in Section 6.1.
4.2 Deliveries to Executives.
(a) As soon as practicable after the Executive's retirement or other
termination of employment prior to a Change in Control, the Trustee shall make
payments to an Executive in accordance with the most recent Payment Schedule
delivered by the Company. Prior to the commencement of payments to the
Executive the Company shall deliver to the Executive a Payment Schedule setting
forth all amounts payable from the Plans (an Individualized Payment Schedule).
As soon as practicable after an Executive's retirement or other termination of
employment following a Change in Control, the Trustee shall deliver to that
Executive an Individualized Payment Schedule. Except as otherwise provided
herein, the Trustee shall make payments to the Executive in accordance with the
Individualized Payment Schedule.
(b) In the event that an Executive reasonably believes that the
Individualized Payment Schedule does not properly reflect the amount payable to
such Executive or the timing or form of payment from the Trust in respect of
the Plan of which he or she is a beneficiary or participant, such Executive
shall be entitled to deliver to the Trustee written notice (the "Executive's
Notice") setting forth the amount, timing or form of payment the Executive
believes is proper under the relevant terms of the Plan. The Trustee shall
also deliver a copy of the Executive's Notice to the Company within 3 business
days of the delivery to the Trustee. Unless the Trustee receives written
objection from the Company within 30 days after receipt by the Trustee of such
notice, the Trustee shall make the payment in accordance with the Executive's
Notice. In the event the Trustee receives written objection from the Company
within such 30 day period and in the event the Company and Executive cannot
agree on the terms of the Payment Schedule, the dispute shall be resolved in
accordance with Section 7.3 hereof. Nothing in this Section shall create a
duty on the part of the Executive to object to an Individualized Payment
Schedule or other benefit statement provided by the Company, except in the case
of an Individualized Payment Schedule given to the Executive in connection with
the Executive's retirement or other termination of employment.
(c) In the event that the aggregate amount payable in any calendar
month to the Executives entitled to payments during such month exceeds the
current market value of Trust assets, the Trustee shall make a pro rata payment
to each Executive with respect to the Plans in accordance with the priority
levels set forth on Schedule C hereto. All payments shall be made with respect
to the Plans in any designated priority level before any payments are made with
respect to the Plans in any lower level priority. If the aggregate amount
payable in any calendar month with respect to the Plans in any designated
priority level exceeds the current market value of Trust assets after providing
for all higher priorities, the Trustee shall make pro rata payment to each
Executive within such priority level.
The Company may, by written notice to the Trustee, amend or
6
revoke Schedule C at any time prior to a Required Funding Date. If no such
priority levels are in effect at the time for payment of any portion of Trust
assets to the Executives, all deferred compensation agreements shall be given
first priority and all other Plans shall be given second priority. Where any
payment to an Executive is required to be made on a pro rata basis with respect
to a category of Plans within a designated priority level, such payment shall
be based on the amount so payable to such Executive in proportion to the
aggregate amount so payable to all such Executives with respect to all Plans
within the same priority level.
(d) The Trustee shall withhold from any payment due to an Executive
hereunder the amount required by law to be so withheld under federal, state and
local tax withholding requirements or otherwise, and shall pay over to the
appropriate government authority the amounts so withheld.
(e) Except as otherwise provided herein, in the event of any final
determination by the Internal Revenue Service or a court of competent
jurisdiction, which determination is not appealable or the time for appeal or
protest of which has expired, or the receipt by the Trustee of a substantially
unqualified opinion of tax counsel selected by the Trustee, which determination
determines, or which opinion opines, that the Executives or any particular
Executive are subject to federal income taxation on amounts held in Trust
hereunder prior to the distribution to the Executives or Executive of such
amounts, the Trustee shall, on receipt by the Trustee of notice of such
determination or of such opinion, pay to each such Executive the portion of the
Trust includible in such Executive's federal gross income. This Section shall
not give the Trustee the power or duty to determine the tax consequences of
payments from the Trust that may subject an Executive to receipt of an excess
parachute payment, as defined in Section 280G of the Internal Revenue Code of
1986.
4.3 Deliveries to Creditors of the Company. Assets of the Trust are and
shall remain at all times subject to the claims of the general creditors of the
Company. Accordingly, the Company shall not create a security interest in
Trust assets in favor of the Executives or any creditor. If the Trustee
receives the notice provided for in Section 4.4 hereof, or otherwise receives
actual notice that the Company is insolvent or bankrupt as defined in Section
4.4 hereof, the Trustee shall make no further distributions of the Trust to any
of the Executives but shall deliver the entire amount of the Trust only as a
court of competent jurisdiction, or duly appointed receiver or other person
authorized to act by such a court, may direct to make the Trust available to
satisfy the claims of the Company's general creditors. The Trustee shall
resume distribution of the Trust to the Executives under the terms hereof, upon
no less than 30 days advance notice to the Company, if it determines that the
Company was not, or is no longer, bankrupt or insolvent. The Trustee may rely
on any evidence concerning the status or solvency of the Company as may be
furnished to the Trustee which will give the Trustee a reasonable basis for
making such determination.
4.2 Notification of Bankruptcy or Insolvency. The Company, through its
Chief Executive Officer, shall notify the Trustee promptly in writing of the
Company's bankruptcy or insolvency. Prior to receipt of such notice, the
Trustee shall have no duty to inquire whether or not the Company is bankrupt or
insolvent. The Company shall be deemed to be bankrupt or insolvent:
(i) upon the entry of a decree or order by a court having
jurisdiction adjudging the Company bankrupt or insolvent, or
approving a petition seeking reorganization, arrangement,
adjustment or composition of the Company under the Federal
Bankruptcy Act, or appointing a receiver (or other similar
official) of the Company, or ordering the winding up or
liquidation of the affairs of the Company;
(ii) upon the institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by the
Company to the institution of bankruptcy or insolvency
proceedings against it, or the filing by the Company of a
petition seeking reorganization or relief
7
under the Federal Bankruptcy Act, or the consent by the Company
to the filing of any such petition or to the appointment of a
receiver, trustee (or other similar official) of the Company, or
the making by the Company of an assignment for the benefit of
creditors, or the admission by the Company in writing of its
inability to pay its debts as they mature;
(iii) if the Company is unable to pay its debts as they mature; or
(iv) upon the appointment of a receiver by the Federal Deposit
Insurance Corporation.
ARTICLE V
TRUSTEE
5.1 Trustee.
(a) The Trustee shall be an Independent Trustee appointed by the
Company's Board of Directors. The duties and responsibilities of the Trustee
shall be limited to those expressly set forth in this Trust Agreement, and no
implied covenants or obligations shall be read into this Trust against the
Trustee. For purposes of this Trust, an "Independent Trustee" shall mean a
commercial bank or trust company which is not an affiliate of the Company, but
which is a national banking association or established under the laws of the
one of the states of the United States.
(b) If all or any part of the Trust assets is at any time attached,
garnished or levied upon by any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment or decree
shall be made or entered by a court affecting such property or any part
thereof, then and in any of such events the Trustee is authorized, in its sole
discretion, to rely upon and comply with any such order, writ, judgment or
decree, and it shall not be liable to the Company (or any of its subsidiaries)
or any Executive covered by this Trust by reason of such compliance even though
such order, writ, judgment or decree subsequently may be reversed, modified,
annulled, set aside or vacated.
(c) The Trustee shall maintain such books, records and accounts as
may be necessary for the proper administration of the Trust, including, without
limitation, as provided in Section 2.1 hereof, and shall render to the Company,
on or prior to the last day of the first month following each calendar quarter
following the date of this Trust until the termination of this Trust (and on
the date of such termination), an accounting with respect to the Trust as of
the end of the immediately preceding calendar quarter (and as of the date of
such termination). Upon the written request of an Executive or the Company,
the Trustee shall deliver to such Executive or the Company, as the case may be,
a copy of such accounting and a record of any amounts delivered by the Company
to the Trustee or paid by the Trustee with respect to the account of such
Executive.
(d) The Trustee shall not be liable for any act taken or omitted to
be taken hereunder if taken or omitted to be taken by it in good faith. The
Trustee shall also be fully protected in relying upon any Payment Schedule,
modified Payment Schedule or notice delivered or given hereunder, which it in
good faith believes to be genuine and executed and delivered in accordance with
this Trust Agreement.
(e) The Trustee may consult with advisors to be selected by it from
time to time, including but not limited to attorneys (who may be counsel to the
Company or the Trustee), accountants, actuaries, investment managers or
advisors, and such other agents or advisors as the Trustee in its sole
discretion shall deem advisable or appropriate.
(f) The Trustee shall be reimbursed by the Company for its
reasonable expenses incurred in connection with the performance of its duties
hereunder and shall be paid reasonable fees for the performance of such duties.
8
(g) The Company agrees to indemnify and hold harmless the Trustee
from and against any and all damages, losses, claims or expenses as incurred
(including expenses of investigation and fees and charges for advice and
counsel to the Trustee and any taxes imposed on the Trust or income of the
Trust) arising out of or in connection with the performance by the Trustee of
its duties hereunder. Any amount payable to the Trustee under paragraph 5.1(f)
or this paragraph 5.1(g) shall be paid by the Company promptly upon demand
therefore by the Trustee or, if the Trustee so chooses in its sole discretion,
from the Trust. In the event that payment is made hereunder to the Trustee
from the assets of the Trust, the Trustee shall promptly notify the Company in
writing of the amount of such payment. The failure of the company to transfer
any such amount shall not in any way impair the Trustee's right to
indemnification, reimbursement and payment pursuant to paragraph 5.1(f) of this
Section 5.1 or this paragraph 5.1(g).
5.2 Powers.
The Trustee shall have, in addition to any implied powers and duties which
may be necessary to carry out the provisions of the Trust, and subject to the
Company's express directions pursuant hereto, the following powers and duties:
(a) to sell, exchange, hypothecate, convey and otherwise transfer
any securities or other property held in the Trust, at public or private sale,
for such prices and on such terms as the Trustee deems suitable, without the
approval of any court and without any obligation upon any person dealing with
the Trustee to see to the application of any money or other property delivered
to it;
(b) To hold uninvested or to deposit in any bank such sums of cash
as it deems reasonable and in the best interests of the Trust;
(c) To exercise any right, including the right to vote, personally
or by general or special proxies or powers of attorney, appurtenant to any
securities or other property held in the Trust;
(d) To exercise or sell any conversion privileges, subscription
right or other rights or options and to make any payments incidental thereto;
(e) To oppose, consent to, or otherwise participate in any
reorganization, recapitalization or other changes affecting securities held in
the Trust, to delegate discretionary powers to the extent permitted by law, and
to pay expenses, assessments or charges in connection therewith; to retain any
securities or other property allotted to the Trust in connection with any such
reorganization, recapitalization or other changes; and to generally exercise
any of the powers of an owner with respect to any securities or other property
held in the trust;
(f) To hold securities or other property in its name as Trustee or
in the name of one or more nominees or in bearer form; provided, the Trust
records shall at all times show that such securities or property as part of the
Trust;
(g) To make, execute, acknowledge and deliver any instruments that
may be necessary or appropriate to carry out the powers herein granted;
(h) To consult and employ suitable advisors, including, but not
limited to, attorneys, accountants, actuaries, investment managers or advisors,
and such other agents or advisors as the Trustee shall deem necessary or
appropriate to assist in the performance of the Trustee's duties, and to pay
reasonable expenses and compensation in connection therewith;
(i) To settle, compromise or submit to arbitration, any claims,
debts or damages, due or owing to or from the Trust, to commence or defend
suits or legal proceedings and to represent the Trust in all suits or legal
proceedings;
(j) To accept and retain any securities or other property received
or acquired by the Trust, whether or not such property would normally be
purchased or would then be authorized as investments
9
hereunder;
(k) To collect and receive any money or property due to the Trust
and to give full discharge and acquittance therefor;
(l) To prepare such periodic written reports or other accounting as
required hereunder, and to furnish the Company and the Executives with such
information which either may require for tax or other purposes;
(m) To borrow money from any lender in such amounts and upon such
terms and conditions as shall be deemed advisable or proper to carry out the
purposes of the Trust, except that the Trustee may not borrow money to satisfy
the Company's obligation to fund this Trust pursuant to Article II hereof;
(n) To register any securities held by it in its own name or in the
name of any custodian of such property or of its nominee, including the nominee
of any system for the central handling of securities, with or without the
addition of words indicating that such securities are held in a fiduciary
capacity and to deposit or arrange for the deposit of any such securities with
such a system;
(o) To transfer assets of the Trust to a successor trustee or
trustees as provided in Section 5.3;
(p) To adopt uniform rules of procedure and regulations necessary
for the proper and efficient administration of the Trust including but not
limited to the distribution of amounts to the beneficiaries hereunder, provided
such rules are not inconsistent with the terms hereof, and to enforce such
rules and regulations;
(q) To obtain fiduciary insurance or bonding coverage in such
amounts and covering such risks and occurrences as the Trustee in its sole
discretion may determine; and
(r) To do all acts, though not specifically named herein, which the
Trustee deems advisable to carry out the purpose of this Trust.
5.3 Successor Trustees. The Company (or, in the event a Required Funding
Date has passed and less than all of the obligations of the Trust have been
satisfied, Executive(s) to whom at least 65% of all amounts covered by the most
recent Payment Schedule are payable) may remove the Trustee and the Trustee may
resign and be discharged from its respective duties hereunder at any time by
giving notice in writing of such resignation to the Company (or, in the event a
Required Funding Date has passed and less than all of the obligations of the
Trust have been satisfied, Executive(s) to whom at least 65% of all amounts
covered by the most recent Payment Schedule are payable) specifying a date (not
less than 30 days after the giving of such notice) when such resignation shall
take effect. The Company (or, in the event a Required Funding Date has passed
and less than all of the obligations of the Trust have been satisfied,
Executive(s) to whom at least 65% of all amounts covered by the most recent
Payment Schedule are payable) shall appoint a successor trustee, such trustee
to become the Trustee hereunder upon the resignation date specified in such
notice. If, within 30 days after such notice, no successor Trustee has been
appointed, the Trustee shall be entitled, at the expense of the Company, to
petition a United States District Court or any of the courts of the State of
Michigan having jurisdiction to appoint a successor. The Trustee who has
resigned or been removed shall continue to serve until its successor accepts
the trust and receives delivery of the Trust.
ARTICLE VI
TERMINATION, AMENDMENT AND WAIVER
6.1 Termination. This Trust shall be terminated upon the earliest of the
following events: (i) the exhaustion of all Trust assets; or (ii) the final
payment of all amounts payable to all of the Executives pursuant to the Plans.
Promptly upon termination of this Trust, any remaining portion of Trust assets
shall be paid to the
10
Company.
6.2 Amendment and Waiver. This Trust may be amended only by an
instrument in writing signed by the Trustee and the Company, or, in the event a
Change in Control has occurred and less than all of the Trust's obligations
have been satisfied, the written consent of Executives to whom at least 65% of
all amounts covered by the most recent Payment Schedule are payable. The
parties hereto, together with, in the event a Required Funding Date has passed
and less than all of the Trust's obligations have been satisfied, the consent
of Executives to whom at least 65% of all amounts covered by the most recent
Payment Schedule are payable, may at any time waive compliance with any of the
agreements or conditions contained herein. Any agreement on the part of a
party hereto or an Executive to any such waiver shall be valid if set forth in
an instrument in writing signed on behalf of such party or Executive.
ARTICLE VII
GENERAL PROVISIONS
7.1 Further Assurances. The Company shall, at any time and from time to
time, upon the reasonable request of the Trustee, execute and deliver such
further instruments and do such further acts as may be necessary or proper to
effectuate the purposes of this Trust.
7.2 Certain Provisions Relating to This Trust.
(a) This Trust sets forth the entire understanding of the parties
with respect to the subject matter hereof and supersedes any and all prior
agreements, arrangements and understandings relating thereto. This Trust shall
be binding upon and inure to the benefit of the parties and their respective
successors and legal representatives.
(b) This Trust shall be governed by and construed in accordance with
the laws of the State of Michigan, to the extent not preempted by federal law.
(c) In the event that any provision of this Trust or the application
thereof to any person or circumstances shall be determined by a court of proper
jurisdiction to be invalid or unenforceable to any extent, the remainder of
this Trust, or the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby, and each provision of this Trust shall be valid and enforced
to the fullest extent permitted by law.
7.3 Arbitration. Any dispute as to the interpretation or application of
the provisions of this Trust and the amount, timing or form of any payment
hereunder may, at the Trustee's sole option and in its discretion, be
determined exclusively by binding arbitration in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be entered
on the arbitrators's award in any court of competent jurisdiction. All fees
and expenses of such arbitration shall be considered an expense of the Trust
under Section 5.1(g) hereof and paid by the Company.
7.4 Notices. Any notice, report, demand or waiver required or permitted
hereunder shall be in writing and shall be given personally or by prepaid
registered or certified mail, return receipt requested, addressed as follows:
If to the Company: First of America Bank Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Secretary
If to the Trustee: Wachovia Bank of North Carolina, N.A.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attn: Employee
Benefit Trust Services
If to an Executive, to the address of such Executive as set forth in the
records of the Company or such other address as the Executive may
11
set forth in a written notice to the Company and the Trustee.
A notice shall be deemed received upon the date of delivery if given
personally, or, if given by mail, upon the receipt thereof.
7.5 Trust Beneficiaries. Each Executive entitled to a benefit payment
under a Plan covered by this Trust Agreement is an intended beneficiary under
this Trust, and shall be entitled to enforce all terms and provisions hereof
with the same force and effect as if such person had been a party hereto. In
addition to the foregoing, individual agreements between the Company and an
Executive may refer to this Trust, and the Company shall, by entering into such
an agreement, have assumed a direct contractual obligation to the Executive to
establish and maintain this Trust in accordance with its terms and the terms of
such other agreement. The Executive shall have no preferred claim on, or any
beneficial ownership in, the Trust, and all rights created hereunder and under
the Plans shall be unsecured contractual rights of the Executives against the
Company and the status of the Executives shall only be as general unsecured
creditors. Benefits to the Executives hereunder may not be anticipated,
assigned, transferred, pledged or otherwise conveyed. Prior to a Required
Funding Date, the Company may, in its sole discretion, at any time and from
time to time, by means of a modified Payment Schedule accompanied by revised
Schedules A and C, (i) provide for coverage hereunder of any other plan or
agreement and/or Company executive and (ii) upon termination of any Plan or
final payment of all amounts thereunder, exclude such Plan and Executive who is
a party thereto from coverage hereunder; provided, however, any such action
shall be treated as an amendment of this Trust and shall be subject to all of
the provisions of Section 6.2 hereof.
IN WITNESS WHEREOF, the parties have executed this Trust as of the date
first above written.
FIRST OF AMERICA BANK CORPORATION
By: _______________________________
Its: Chairman & Chief
Executive Officer
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By: _______________________________
Its: _______________________________
12
SCHEDULE A
Executive Plans and Agreements covered by the Executive Management
Plans Trust:
Individual Deferred Compensation Agreements
Supplemental Savings Plan
Annual Incentive Compensation Plan for Key Corporate Executives and Key
Affiliate Executives
Long-Term Incentive Compensation Plan
Excess Benefit Plan
Supplemental Retirement Plan
Executive Employment Agreements
Management Continuity Agreements
1987 Stock Option Plan
Stock Compensation Plan
SCHEDULE B
For purposes of determining the Target Funding Amount and the Maximum
Funding Amount as of any given date, the Consulting Firm shall use the
following assumptions:
1. For purposes of determining the present or future value of an
Executive's account balance in an Individual Deferred Compensation Agreement or
the Supplemental Savings Plan, the Consulting Firm shall assume that the
Executive's total compensation increase at the rate assumed for compensation
increases for purposes of funding the First of America Bank Corporation
Employees' Retirement Plan (the Pension Plan), as set forth in the most recent
actuarial valuation for the Pension Plan (the Actuarial Valuation). In
addition, the Consulting Firm shall determine present or future value by
applying the interest rate equal to the rate specified in the Plans, or if no
such rate is specified, the assumed rate of return on Pension Plan assets
specified in the Actuarial Valuation for the purposes of determining the
Company's pension expense in accordance with Financial Accounting Standard 87.
2. For purposes of determining the present value of an Executive's
benefit in the Excess Benefit Plan, the Supplemental Retirement Plan, Executive
Employment Agreements, and Management Continuity Agreements, the Consulting
Firm shall use the assumptions for calculating lump sum amounts set forth in
such plans and agreements.
3. For purposes of determining the obligations of the Company pursuant to
the 1987 Stock Option Plan or the Stock Compensation Plan, the Consulting Firm
shall assume a per share value of First of America Bank Corporation common
stock equal to the greater of the highest quoted price per share as reported in
the Wall Street Journal as of the date of such determination or the amount that
is being offered to acquire each share pursuant to a Potential Change in
Control.
SCHEDULE C
Priority levels of distributions from the Executive Management Plans
Trust:
First Priority Level: Individual Deferred Compensation
Agreements
Second Priority Level: Supplemental Savings Plan
13
Third Priority Level: Supplemental Retirement Plan
Fourth Priority Level: Excess Benefit Plan
Fifth Priority Level: Annual Incentive Compensation Plan
for Key Corporate Executives and Key
Affiliate Executives
Sixth Priority Level: Long-Term Incentive Compensation
Plan
Seventh Priority Level: Executive Employment Agreements and
Management
Continuity Agreements
Eighth Priority Level: 1987 Stock Option Plan
Ninth Priority Level: Stock Compensation Plan
