Exhibit 10.1
THE BEAR XXXXXXX COMPANIES INC.
2008 TRUST AGREEMENT
This Trust Agreement, dated as of February 14, 2008 (as amended from time
to time, the "Agreement"), by and between The Bear Xxxxxxx Companies Inc., a
Delaware corporation (the "Company", as more fully defined in Exhibit A hereto),
and Wilmington Trust Company, a Delaware corporation (the "Trustee", as more
fully defined in Exhibit A hereto).
RECITALS:
WHEREAS, the Company has in place certain compensation plans, including
The Bear Xxxxxxx Companies Inc. Capital Accumulation Plan for Senior Managing
Directors and The Bear Xxxxxxx Companies Inc. Restricted Stock Unit Plan, as
such plans may be amended, supplemented, replaced or extended, and has listed
such plans on Schedule 1 to this Agreement, which Schedule 1 may from time to
time be amended in accordance with Section 15(b) hereof to add or delete plans
(the plans listed on Schedule 1, as such Schedule may from time to time be
amended, are each referred to herein as a "Plan" and collectively referred to
herein as "Plans");
WHEREAS, the Company has incurred or expects to incur liability under the
terms of the Plans with respect to Awards made or to be made to certain
individuals participating in the Plans that will result in the payment of shares
of Common Stock, $1.00 par value per share, of the Company ("Shares");
WHEREAS, the Company wishes to establish a trust (the "Trust") for the
purpose of holding all of the Shares underlying Awards granted pursuant to the
Plans and to contribute and/or sell to the Trust the Shares to be held therein,
subject to the claims of general creditors of the Company, Bear Xxxxxxx & Co.
Inc. or any of the subsidiaries or affiliates which are reflected on Schedule 2
hereof, as may be amended from time to time, or any subsidiary succeeding to any
substantial part of the business now conducted by any of such corporations
(collectively, the "Significant Subsidiaries") in the event the Company or a
Significant Subsidiary becomes insolvent (as hereinafter defined), until paid to
Participants (as hereinafter defined) in such manner and at such times as the
Company may specify to fulfill the Company's obligations under the Plans;
WHEREAS, it is the intention of the parties that this Trust shall not
affect the status of the Plans as unfunded plans maintained for the purpose of
providing deferred compensation for a select group of management employees for
purposes of Title I of ERISA;
WHEREAS, it is the intention of the Company to make contributions to the
Trust to provide itself with a source of funds to assist it in the meeting of
its obligations under the Plans, it being understood that, except as expressly
provided otherwise herein, Awards shall in all events be paid in Shares; and
WHEREAS, capitalized and certain other terms used in this Agreement have
the meanings given them in Exhibit A hereto.
NOW, THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
Section 1. Establishment of Trust. (a) The Company hereby contributes to
the Trustee in trust the cash and Shares set forth in Schedule 3 hereto, which
shall initially become the principal of the Trust to be held, administered and
disposed of by the Trustee as provided in this Agreement. Shares contributed to
the Trust or purchased with cash so contributed shall be allocated to the Awards
granted under the Plans.
(b) The parties intend that the Trust will be an independent legal
entity with title to and power to convey all of its assets. All Shares held
in the Trust shall be held in a fiduciary capacity for the benefit of the
persons entitled thereto under the Plans, subject to the terms of this
Agreement and the Plans. The Trust is not a part of any of the Plans and does
not itself provide retirement or other benefits to any Participant.
(c) The assets held by the Trust shall be applied by the Trustee, in
accordance with Instruction Schedules delivered to the Trustee by the Company
and this Agreement, to satisfy the Company's obligations in connection with
Awards. The Plans under which Awards may be outstanding at any given time
will be reflected on Schedule 1 to this Agreement, as such Schedule may be
amended from time to time in accordance with Section 15(b) hereof.
(d) The Trust hereby established shall be irrevocable by the Company.
(e) The Trust is intended to be a grantor trust, of which the Company
is the grantor, for the purposes and within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A of the Code, and shall be construed
accordingly.
(f) 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 Participants and general creditors
as herein set forth. Participants shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the Plans and this Agreement shall be mere unsecured contractual rights
of Participants against the Company. The Company shall have no right or power
to divert to others or to the Company, except as otherwise permitted under
Sections 2(b) and 6, any of the Trust assets, provided that any assets held
by the Trust will be subject to the claims of the general creditors of the
Company and the Significant Subsidiaries, or both, under federal and state
law in the event the Company or a Significant Subsidiary becomes insolvent
(as defined in Section 3(a) hereof).
(g) The Company, in its sole discretion, may at any time, or from time
to time, subject to any required approval of the Board of Directors of the
Company, make additional contributions of cash or contributions or sales of
other property, including Shares, in trust with the Trustee to augment the
principal to be held, administered and disposed of by the Trustee as provided
in this Agreement. Neither the Trustee nor any Participant shall have any
right to compel such additional contributions or sales.
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(h) Except as herein otherwise provided, title to the assets of the
Trust shall at all times be vested in the Trustee, who shall hold such assets
in a fiduciary capacity for the benefit of the persons entitled thereto under
the Plans, subject to the terms of this Agreement and the Plans, and Shares
that are part of the Trust shall be registered in the name of the Trustee on
the records of the Company and shall be held in such manner that the
Trustee's name and the fiduciary capacity in which the Shares are held are
fully disclosed and the interests of others in the Trust shall be only the
right to have such assets received, held, invested, administered and
distributed in accordance with the provisions of the Trust.
Section 2. Payments to Participants. (a) Except as otherwise provided in
Sections 1(f), 3 or 6 hereof, Payments from the Trust shall only be made to
Participants according to the Instruction Schedule provided and in accordance
with this Agreement. When Payments in accordance with the most recent
Instruction Schedule submitted by the Company to the Trustee are due, the
Trustee shall make Payments to Participants in accordance with such Instruction
Schedule, subject to the terms of this Agreement. The Company shall be
responsible for the maintenance of any accounts for Participants under the
respective Plans and for all withholding-related filings and reports. The
Company shall be responsible for determining that a Payment is in accordance
with the relevant Plan and Award agreement and applicable law.
(b) Prior to the Payment of Shares or other assets to a Participant,
the Trustee shall withhold the Withholding Amount, if any, as specified in
the Instruction Schedule pursuant to which the Payment is to be made. The
amount so withheld shall be remitted by the Trustee as directed by the
Instruction Schedule, including to the Company if so instructed by the
Company. In the case of a Payment to be made in Shares, the Trustee shall
reduce the amount of the Payment due by the smallest number of whole Shares
that has a value equal to or greater than the Withholding Amount. For
purposes of this Section 2(b), the Shares shall be valued at their Fair
Market Value. Any amount so withheld in excess of the Withholding Amount will
be paid by the Company to the Participant in cash.
(c) The entitlement of a Participant to benefits under the Plans shall
be determined by the Company or such party as it shall designate under the
Plans and any claim for such benefit shall be considered and reviewed under
the procedures set out in the Plans.
(d) If the principal of the Trust, and earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Plans, 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
insufficient.
Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary
When Company or a Significant Subsidiary Is Insolvent. (a) The Trustee shall
cease payment of benefits to Participants if the Company or a Significant
Subsidiary is insolvent. The Company or a Significant Subsidiary shall be
considered "insolvent" for purposes of this Agreement if (i) the Company or the
Significant Subsidiary, whichever is applicable, is unable to pay its debts as
they become due, or (ii) the Company or the Significant Subsidiary is subject to
a pending proceeding as a debtor under the United States Bankruptcy Code. Except
to the extent required by law or a court of competent jurisdiction, in no event
may assets of the Trust be used in the event of insolvency to pay inter-company
debt of the Company or a Significant Subsidiary to any entity
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that is 50% or more controlled, directly or indirectly, by the Company or the
Significant Subsidiary, and the Trustee shall not be required to make a
determination as to the foregoing but shall be entitled to rely on court
order(s) or a written opinion of an outside law firm which may be the Company's
law firm.
(b) At all times during the continuance of this Trust, as provided in
Section 1(f) hereof, the principal and income of the Trust shall be subject
to claims of general creditors of the Company and the Significant
Subsidiaries under federal and state law as set forth below, it being
understood that payments cannot be made hereunder to creditors absent
insolvency:
(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 or a Significant Subsidiary's insolvency. If a person claiming
to be a creditor of the Company or a Significant Subsidiary alleges in
writing to the Trustee that the Company or a Significant Subsidiary has
become insolvent, the Trustee shall determine whether the Company or the
Significant Subsidiary, whichever is applicable, is insolvent and, pending
such determination, the Trustee shall discontinue Payments.
(2) Unless the Trustee has actual knowledge of the Company's or a
Significant Subsidiary's insolvency, or has received notice from the
Company or a Significant Subsidiary or a person claiming to be a creditor
alleging that the Company or a Significant Subsidiary is insolvent, the
Trustee shall have no duty to inquire whether the Company or any
Significant Subsidiary is insolvent. The Trustee may in all events rely on
such evidence concerning the Company's and Significant Subsidiaries'
solvency as may be furnished to the Trustee and that provides the Trustee
with a reasonable basis for making a determination concerning such
solvency.
(3) If at any time the Trustee has determined that the Company or a
Significant Subsidiary is insolvent, the Trustee shall discontinue
Payments and shall hold the assets of the Trust for the benefit of the
Company's or the Significant Subsidiary's, whichever is applicable,
general creditors. Nothing in this Agreement shall in any way diminish any
rights of Participants to pursue their rights as general creditors of the
Company with respect to benefits due under the Plans or otherwise.
(4) The Trustee shall not resume Payments in accordance with Section
2 of this Agreement until the Trustee has determined that the Company or
the Significant Subsidiary, whichever is applicable, is not insolvent (or
is no longer insolvent) and thereafter has received an Instruction
Schedule.
(c) Provided that there are sufficient assets, if Trustee discontinues
the payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
Participants under the terms of the Plans for the period of
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such discontinuance, less the aggregate amount of any payments made to the
Plan Participants by the Company in lieu of the payment provided for
hereunder during any such period of discontinuance.
Section 4. Transfers to Company. Except as otherwise set forth in Section
1(f) and Section 3 hereof, the Company shall have no right or power to divert to
others or to the Company any of the Trust assets.
Section 5. Dividends. Any cash dividend or distribution with respect to
the Shares held in the Trust shall be invested in Shares as soon as practicable
and shall be retained by the Trust in the Trustee's fiduciary capacity and
allocated to Awards granted under the Plans, which allocation is the
responsibility of the Company. Any other dividend or distribution made with
respect to the Shares held in the Trust shall be retained by the Trust in the
Trustee's fiduciary capacity and allocated to Awards granted under the Plans,
which allocation is the responsibility of the Company. Dividends and
distributions (including dividends and distributions invested in Shares pursuant
to this Section) shall be distributed by the Trustee in accordance with the
Instruction Schedule to the respective Participants no later than the time that
the Shares with respect to which such dividends and distributions were made are
distributed to such Participants as specified in an Instruction Schedule
delivered to the Trustee by the Company. Except as otherwise permitted by
Section 2(b), in no event shall any dividend or other distribution with respect
to the Shares be distributed to the Company.
Section 6. Investment of Trust Assets. Subject to the proviso to this
sentence and the remainder of this Section 6, the number of Shares held in the
Trust shall not be less than, and shall not exceed, the number of Shares
underlying the Awards, and the Company shall be responsible for determining the
foregoing and for directing the Trustee with respect thereto; provided further,
that if a Participant is no longer entitled to the Shares underlying the Awards
granted thereto under the Plans due to termination or any other cause, such
Shares shall remain in the Trust and shall be reallocated in accordance with an
Instruction Schedule as promptly as practicable to satisfy Awards granted to
other Participants under the Plans and, except as otherwise permitted by Section
2(b), in no event shall such Shares be returned to the Company. At the Company's
direction, investments in Shares may be made through open market purchases,
private transactions or (with the Company's consent) purchases from the Company.
In addition to Shares, the Trustee may invest assets of the Trust that are not
Shares in:
(a) Any form of marketable financial instrument traded on the New York
Stock Exchange (including, in particular, Shares or rights to acquire Shares, of
the Company) and assets of any kind, including shares of any registered
investment company, whether or not the Trustee or any of its affiliates is an
advisor to, or other service provider to, such investment company and receives
compensation from such investment company for the services provided (which
compensation shall be in addition to the compensation of the Trustee under this
Trust). The Company acknowledges that shares in any such investment company are
not obligations of the Trustee or any other bank, are not deposits and are not
insured by the Federal Deposit Insurance Corporation (the "FDIC"), the Federal
Reserve or any other governmental agency.
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(b) The Trustee is specifically authorized to invest idle, or otherwise
uninvested cash in the Service class shares of the Wilmington Prime Money Market
Portfolio (the "Prime MM Portfolio"), a money market mutual fund managed by an
affiliate of the Trustee. The Company acknowledges that the Prime MM Portfolio
is an entity separate from Wilmington Trust Company; and that shares in the
Prime MM Portfolio are not obligations of Wilmington Trust Company, are not
deposits and are not insured by the FDIC, the Federal Reserve or any other
governmental agency. Wilmington Trust Company or its affiliates are compensated
by the Prime MM Portfolio for investment advisory, custodian, shareholder
servicing, distribution and other services, and such compensation is described
in detail in the prospectus for the Prime MM Portfolio and is in addition to the
compensation paid to Trustee hereunder with respect to that portion of the
Trust, if any, invested in the Prime MM Portfolio.
(c) The Trustee may hold that portion of the Trust as is appropriate,
for the ordinary administration and for the disbursement of funds in cash,
without liability for interest notwithstanding the Trustee's receipt of "float"
from such uninvested cash, by depositing the same in any bank (including
deposits which bear a reasonable rate of interest in a bank or similar financial
institution supervised by the United States or a State, even where a bank or
financial institution is the Trustee, or is otherwise a fiduciary of the Plans)
subject to the rules and regulations governing such deposits, and without regard
to the amount of such deposit. In addition, the Trustee is specifically
authorized to invest idle, or otherwise uninvested, cash in a money market
mutual fund selected by the Trustee in its sole discretion, including any money
market fund associated with the Trustee as described in subparagraph (b) above.
The Trustee, however, acknowledges the desire of the Company that the
Trust corpus be invested primarily in Shares, and the Company acknowledges that
any diversification of investments that otherwise might be required of a trustee
under applicable State law is hereby waived. Except as otherwise provided in
Section 9 ("Voting Rights and Tendering of Shares") and except as otherwise
provided herein, all rights associated with assets of the Trust shall be
exercised by the Trustee, or the person designated by Trustee (which shall not
be the Company or an affiliate of the Company), and shall in no event be
exercisable by or rest with Plan Participants. The Company, however, shall have
the right to instruct the Trustee to dispose of any or all of the assets of the
Trust to a third party to be selected by the Trustee (which for the avoidance of
doubt shall not be the Company or an affiliate thereof) provided such
disposition results in consideration being paid to the Trust that is at least
equal to the Fair Market Value of the Trust assets that are so disposed of. In
no event shall any assets so disposed of (including Shares), or any
consideration received in exchange therefor, be transferred to the Company or
any affiliate thereof. Such right shall not be exercisable in connection with a
tender offer for the Shares, which shall be governed by Section 9 hereof. This
right is exercisable by the Company without the approval or consent of the Plan
participants. In exercising such right, the Company shall give due consideration
to the fact that Awards are required to be paid in Shares pursuant to the Plans.
Section 7. Accounting by the Trustee. Subject to Section 9(b) hereof, the
Trustee shall keep, and supply the Company with, accurate and detailed records
of all investments, receipts, disbursements, and all other transactions required
to be made by the Trust, 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 60 days after the
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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, subject to Section 9(b) hereof, a
description of all securities and investments purchased and sold with the cost
or net proceeds of such purchases or sales (accrued interest paid or receivable
being shown separately), and showing all cash, securities and other property
held in the Trust at the end of such year or as of the date of such removal or
resignation, as the case may be. Such account statements shall be mailed to the
Company or, if the Company agrees, delivered via e-mail or other electronic
means. In the absence of written notice to the Trustee by the Company of
exceptions or objections to any such account within 90 days of its receipt of
such account from the Trustee, the Company shall be deemed to have approved such
account, and the Trustee shall be forever released and discharged from all
liability and further accountability to the Company or any other person with
respect to the accuracy of such accounting and all acts and failures to act of
the Trustee reflected in such account. In such case, or upon the written
approval by the Company of any such account, the Trustee shall be released,
relieved and discharged from all liability and further accountability to the
Company or any other person with respect to all matters set forth in such
account and all acts and failures to act of the Trustee reflected in such
account as though such account had been settled by the decree of a court of
competent jurisdiction. Neither Company, any participant nor any other person
shall be entitled to any additional or different accounting by Trustee and
Trustee shall not be compelled to file in any court any additional or different
accounting. For purposes of regulations promulgated by the FDIC, Trustee's
account statements shall be sufficient information concerning securities
transactions effected for the Trust, provided that Company, upon written
request, shall have the right to receive at no additional cost written
confirmations of such securities transactions, which shall be mailed or
otherwise furnished by the Trustee within the timeframe required by applicable
regulations.
The Trustee shall periodically determine the market value of the assets of
the Trust or, in the absence of readily ascertainable market values, value the
assets of the Trust, at such values as the Trustee shall determine in accordance
with methods consistently followed and uniformly applied. With respect to assets
without readily ascertainable market values, the Trustee may rely for all
purposes of this Trust Agreement on the latest valuation and transaction
information submitted to it by the person responsible for the investment. The
Company shall cause such person to provide the Trustee with all information
needed by the Trustee to discharge its obligations to value such assets and to
account under this Trust Agreement.
Section 8. Responsibility of the Trustee. (a) If the Trustee undertakes or
defends any litigation arising in connection with this Trust, the Company
agrees, except as otherwise provided in Section 8(f) hereof, to indemnify the
Trustee against the Trustee's reasonable costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses) relating thereto
and to be primarily liable for such payments. Such costs, expenses and
liabilities shall be paid from the Trust to the extent of cash held in the Trust
and to the extent not previously paid by the Company, and any such remaining
fees and expenses shall be paid by the Company. In no event shall the Trustee
have any liability or responsibility to undertake, defend or continue any
litigation unless payment of related fees and expenses is ensured to the
reasonable satisfaction of Trustee.
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(b) The Trustee may consult with legal counsel with respect to any of
its duties or obligations hereunder.
(c) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist in
performing any of its duties or obligations hereunder; and may pay their
reasonable fees and expenses, which shall be deemed to be expenses of the
Trust and which shall be paid in accordance with Section 10.
(d) The Trustee shall have, without exclusion, all powers conferred on
trustees by applicable law, unless expressly provided otherwise herein, and
the Trustee shall have the following powers and rights, in addition to those
provided elsewhere in this Agreement or by law, but subject in all cases to
the other provisions of this Agreement:
(i) to retain any asset of the Trust;
(ii) with the consent of the Company, to settle, submit to arbitration,
compromise, contest, prosecute or abandon claims and demands in favor of
or against the Trust;
(iii) to exercise any of the powers and rights of an individual owner
with respect to any asset of the Trust and to perform any and all other
acts that in its judgment are necessary or appropriate for the proper
administration of the Trust even though such powers, rights and acts are
not specifically enumerated in this Agreement;
(iv) to cause any asset of the Trust to be issued, held or registered
in the Trustee's name or in the name of its nominee, or in such form that
title will pass by delivery, provided that the records of the Trustee
shall indicate the true ownership of such asset;
(v) to utilize another entity (but not the Company, a Significant
Subsidiary or any affiliate thereof) as custodian to hold, but not invest
or otherwise manage or control, assets of the Trust (provided that all
Shares are held by and in the name of the Trustee).
(e) Notwithstanding any powers granted to the Trustee pursuant to this
Agreement or applicable law, the Trustee shall not have any power that could
give this Trust the objective of carrying on a business and dividing the
gains therefrom, within the meaning of Section 301.7701-2 of the Procedure
and Administrative Regulations promulgated pursuant to the Code.
(f) The Company shall indemnify, defend and hold harmless the Trustee
from and against any and all liabilities, claims, losses, suits or expenses
(including reasonable attorneys' fees) of whatever kind and nature that may
be imposed upon, asserted against or incurred by the Trustee at any time by
reason of its provision of services under this Agreement or its status as the
Trustee, except to the extent that any such liability, claim, loss, suit or
expense arises directly from the Trustee's (or the Trustee's officers',
employees' or agents') gross negligence or willful misconduct in the
performance of responsibilities specifically allocated to it under this
Agreement. This Section 8(f) shall survive the termination of this Agreement.
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(g) Except as prohibited by Section 9(b) hereof, the Trustee shall
provide such reports to the Company as to such matters as the Company may
reasonably request.
Section 9. Voting and Tendering of Shares. (a) With respect to any meeting
of the stockholders of the Company at which the stockholders are to vote on any
corporate action or with respect to any solicitation of written consents in lieu
of a meeting, or in the event of any tender or exchange offer, the Company, its
transfer agent, or other third party service provider appointed by the Company
shall provide the Trustee with (i) a list of all Participants holding Awards
setting forth the number of Shares underlying the Awards held by each such
Participant on the record date for such meeting or action by written consent or
the date of the tender or exchange offer and (ii) the total number of Shares
underlying Awards held by such Participants on such date. Thereupon, the Company
or its transfer agent shall timely distribute or cause to be timely distributed
to each Participant holding Awards on such record date all proxy or consent
solicitation or other materials distributed to stockholders of the Company
generally in connection with such vote or consent or such tender or exchange
offer, together with a form requesting instructions from each such Participant
as to the manner in which such Participant desires Shares underlying the Awards
held by such Participant to be voted or not voted by the Trustee or whether to
tender or exchange such Shares or to refrain from tendering or exchanging such
Shares, as the case may be, and the Company, its transfer agent or other
independent third party service provider appointed by the Company shall confirm
to the Trustee that such distribution was made. Prior to such distribution, the
form requesting Participant instructions shall be submitted to the Trustee for
its prior review and shall be in a form acceptable to the Trustee. The Company
shall cause its transfer agent or other third party service provider appointed
by the Company to collect such instructions from Participants, tabulate the
instructions, and send a report of instructions to the Trustee. In the event
that the Company does not timely confirm that the transfer agent or other third
party service provider appointed by the Company will collect, tabulate and
report to the Trustee such Participant instructions, the Trustee shall be
entitled to perform or retain a third party to perform such duties at the
expense of the Company or, if not paid by the Company, the Trust to the extent
of cash held in the Trust and to the extent not previously paid by the Company,
and any such remaining fees and expenses shall be paid by the Company. Upon
receiving the report of Participant instructions, the Trustee shall vote or
abstain from voting or tender or exchange or refrain from tendering or
exchanging, as the case may be, the number of Shares held in the Trust
underlying the Awards held by a Participant in accordance with the instructions
from or on behalf of such Participant. The Trustee shall vote or abstain from
voting and the Trustee shall tender or exchange or refrain from tendering or
exchanging, as the case may be, any Shares with respect to which proper
instructions are not received pursuant to this Section 9 in proportion to Shares
for which proper instructions have been received pursuant to this Section 9. In
the event a tender or exchange offer is consummated, the proceeds from the
tender or exchange shall be paid into the Trust. The proceeds of the tender or
exchange shall be retained by the Trust in the Trustee's fiduciary capacity and
shall be distributed to the respective Participants as specified in an
Instruction Schedule delivered to the Trustee by the Company no later than the
time that the Shares with respect to which such tender or exchange proceeds
would otherwise have been distributed to such participants. Except as otherwise
permitted by Section 2(b), in no event shall the proceeds of a tender or
exchange offer in respect of the Shares be distributed to the Company. If a
tender offer or exchange offer is not consummated, all Shares tendered or
exchanged shall revert to and continue to be held by the Trust as if such offer
had not been made.
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(b) The Trustee shall maintain procedures reasonably designed to ensure
that all instructions of Participants pursuant to Section 9(a) are collected,
tabulated, transmitted to and carried out by the Trustee without being divulged
or released to the Company or any person affiliated with the Company. If the
Company's transfer agent or other third party service provider appointed by the
Company collects, tabulates, and transmits such instructions, the Company shall
cause the transfer agent or service provider to represent that it maintains such
procedures. All such actions taken by Participants shall be held confidential by
the Trustee and, except as required by applicable law or court order, shall not
be divulged or released to any person other than (i) agents of the Trustee who
are not affiliated with the Company or its affiliates or (ii) by virtue of the
execution by the Trustee of any letter of transmittal for any of the Shares held
in the Trust in connection with any tender or exchange offer.
Section 10. Compensation and Expenses of the Trustee. All fees and
expenses incurred by the Trustee in administering the Trust in accordance with
this Agreement shall be paid by the Company. If not paid by the Company,
expenses of the Trustee in administering the Trust in accordance with this
Agreement shall be paid from the Trust to the extent of cash held in the Trust
and to the extent not previously paid by the Company, and any such remaining
fees and expenses shall be paid by the Company.
Section 11. Resignation and Removal of the 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; provided, however, that no such resignation shall be effective until
a successor Trustee has assumed the office of the Trustee hereunder.
(b) The Trustee may be removed by the Company, subject to the prior
consent of Participants holding Awards to which at least a majority of the
Shares have been allocated, on 10 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 held in the Trust shall be transferred to the
successor Trustee. The transfer shall be completed within 30 days or 10 days
after receipt of notice of resignation or removal or transfer, respectively,
unless the Company extends the time limit.
(d) If the Trustee resigns or is removed, a successor Trustee shall be
appointed, in accordance with Section 12(a) hereof by the effective date of
resignation or removal. 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 such
proceeding shall be allowed as administrative expenses of the Trust and paid
as provided in Section 10 hereof.
Section 12. Appointment of Successor. (a) If the Trustee resigns or is
removed in accordance with Section 11(a) or (b) hereof, the Company may appoint,
subject to the prior consent of Participants holding Awards to which at least a
majority of the Shares have been allocated, any independent third party that is
not affiliated with the Company or its affiliates or the boards of directors
thereof which is a corporation organized under Delaware law that may be granted
corporate trustee powers under state law, as a successor to replace the Trustee
upon
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resignation or removal. For purposes of the appointment of an independent third
party as the trustee (including with respect to Wilmington Trust Company's
appointment hereunder), such a party will not be considered to be affiliated
with the Company or its affiliates solely as a result of entering into
arrangements with the Company or its affiliates to provide services in the
normal course of such third party's business. The appointment shall be effective
when accepted in writing by the successor trustee, who shall have all of the
rights and powers of the former Trustee, including ownership rights in the Trust
assets. The former Trustee shall execute any instrument necessary or reasonably
requested by the Company or the successor Trustee to evidence the transfer. Any
successor Trustee must be an institutional trustee that is unaffiliated with the
Company or its affiliates or the boards of directors thereof.
(b) The successor Trustee need not examine the records and acts of any
prior Trustee and may retain or dispose of existing Trust assets in
accordance with the terms of this Agreement. 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 13. Changes in Organization of the Trustee. (a) In the event that
any corporate Trustee hereunder shall be converted into, shall merge or
consolidate with another corporation, state or federal, the corporation
resulting from such merger or consolidation shall thereafter become and be the
Trustee under the Trust with the same effect as though originally so named.
Section 14. Continuance of the Trustee's Powers in Event of Termination of
the Trust. In the event of the termination of the Trust, as provided herein, the
Trustee shall dispose of the assets of the Trust in accordance with the
provisions hereof. Until the final distribution of the assets of the Trust, the
Trustee shall continue to have all powers provided hereunder as necessary or
expedient for the orderly liquidation and distribution of the assets of the
Trust.
Section 15. Amendment or Termination. (a) Except as otherwise provided
herein, subject to the prior consent of Participants holding Awards to which at
least a majority of the Shares have been allocated, the Company may amend the
Trust at any time and from time to time in any manner which it deems desirable,
provided that no amendment may (i) make the Trust revocable; or (ii) change the
duties, rights, and/or liabilities of the Trustee without the Trustee's consent,
which consent shall not be unreasonably withheld. Notwithstanding the foregoing,
the Company shall retain the power under all circumstances to amend the Trust to
correct any errors or clarify any ambiguities or similar issues of
interpretation in this Agreement.
(b) This Agreement may be amended by adding thereto or subtracting
therefrom one or more unfunded employee benefit plans (within the meaning of
Section 3(3) of ERISA) or plans or arrangements that are not employee benefit
plans (within the meaning of such Section); provided that the Company shall
ensure that at all times this Agreement shall include at least one Plan that
is not an employee benefit plan within the meaning of Section 3(3) of ERISA.
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(c) The Trust may be terminated at any time by the Company, subject to
the prior consent of Participants holding Awards to which at least a majority
of the Shares have been allocated, provided that: (i) all Shares held by the
Trust that are allocated to Awards shall be distributed to Participants in
accordance with an Instruction Schedule as soon as practical following the
fiscal year in which the Trust is terminated; and (ii) all Shares or other
assets held by the Trust that are not allocated to Awards shall be paid to a
charitable, educational or similar not-for-profit foundation, institution or
other organization exempt from taxation pursuant to Section 501(c)(3) of the
Internal Revenue Code and designated by the Trustee (a "Designated Charity")
and shall not be paid to the Company. In designating the Designated Charity,
the Trustee shall consider charities recommended by the Company. Unless
earlier terminated in accordance with the provisions of this Section 15(c),
the Trust shall terminate on the earlier of (x) the date on which
Participants are no longer entitled to benefits pursuant to the terms of the
Plans or (y) at such time as the Trust no longer holds any assets. In the
case of termination pursuant to clause (x) of the preceding sentence, (1) all
Shares held by the Trust that are allocated Awards shall be distributed to
Participants in accordance with an Instruction Schedule as soon as practical
following the fiscal year in which the Trust is terminated, and (2) all
Shares or other assets held by the Trust that are not allocated to Awards
shall be paid to a Designated Charity and shall not be paid to the Company.
(d) In no event may any amendment or termination of the Trust cause the
assets held thereby to be distributed to the Company.
Section 16. Miscellaneous. (a) Any provision of this Agreement prohibited
by law shall be ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(b) Benefits payable to Participants under this 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) Any capitalized terms used herein which are not defined herein or
in Exhibit A hereto shall have the meaning ascribed to such term in the
relevant Plan or other documents which relate to the Award. In the event of
any conflict or inconsistency between the Plan or other documents which
relate to the Award and the Trust Agreement, the Trust Agreement will govern.
(d) This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
(e) The Trustee shall have no duty or responsibility not expressly set
forth in this Trust Agreement. By way of example, but without limiting the
matters subject to the foregoing sentence, the Trustee shall have no
responsibility with respect to the administration or interpretation of the
Plan, payment of Plan benefits other than from the assets of the Trust, the
calculation of tax to be withheld, reported and/or paid to taxing authorities
and (if applicable pursuant to the fee schedule) withholding, remitting, or
reporting to taxing authorities of taxes other than from payments made with
Trust assets to Plan participants and
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other than as directed by the Company, or maintaining participant records
with respect to the Plans.
(f) Trustee represents that it qualifies for Federal Deposit Insurance
Corporation ("FDIC") prorata worth pass-through insurance coverage in
accordance with the standards set forth in applicable federal law and FDIC
insurance regulations. If the Trustee fails at any time in the future to so
qualify for prorata worth pass-through insurance coverage, it will promptly
notify the Company.
(g) In no event will the Trustee have any obligation to provide, and in
no event will Trustee provide, any legal, tax, accounting, audit or other
advice to Company with respect to the Plan or this Trust. Company
acknowledges that it will rely exclusively on the advice of its accountants
and/or attorneys with respect to all legal, tax, accounting, audit and other
advice required or desired by Company with respect to the Plan or this Trust.
Company acknowledges that Trustee has not made any representations of any
kind, and will not make any representations of any kind, concerning the
legal, tax, accounting, audit or other treatment of the Plan or this Trust.
(h) The Company acknowledges that Trustee is not an advisor concerning
or a promoter with respect to the Plan or the Trust, but merely is a service
provider offering the Trust services expressly set forth in this Agreement.
In particular, Company acknowledges that Trustee is not a joint venturer or
partner with Company's accountants, auditors, consultants or with any other
party, with respect to the Plan or this Trust, and that Trustee and Company's
accountants, auditors and consultants at all times remain independent parties
dealing at arm's length, and independently, with each other and with Company.
(i) The Trustee shall have no liability for any losses arising out of
delays in performing the services which it renders under this Trust Agreement
which result from events beyond its control, including without limitation,
interruption of the business of Trustee due to acts of God, acts of
governmental authority, acts of war, riots, civil commotions, insurrections,
labor difficulties (including, but not limited to, strikes and other work
slippages due to slow-downs), or any action of any courier or utility,
mechanical or other malfunction, or electronic interruption.
(j) The Company represents and warrants that the Plans and the
administration thereof and the establishment of this Trust comply with
applicable law and shall continue to be in compliance therewith.
(k) The Company hereby represents, warrants and covenants that,
immediately prior to a transfer or other acquisition from the Company, the
Company is and shall be the sole legal and beneficial owner of all Shares
that are transferred to or acquired by the Trustee from time to time, and the
Company has and shall have all requisite power and authority to issue,
transfer and deliver any such Shares to the Trustee. All Shares delivered to
the Trustee shall be validly issued, fully paid and non-assessable and free
and clear of any liens, security interests or other interests by any other
person or entity other than the Trustee and the creditors of Company as
provided pursuant to the terms of this Trust Agreement. The Company hereby
represents, warrants and covenants that: (i) the Company shall at all
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times comply with all applicable laws, regulations, restrictions and
reporting requirements relating to or affecting the Shares from time to time,
including, without limitation, federal and state securities laws, and the
rules of any applicable exchange; and (ii) each purchase or other
acquisition, sale or distribution of the Trust's Shares shall be in
accordance with all applicable federal and state securities laws, including
without limitation, to the extent applicable, Rule 144 of the Securities Act
of 1933 Act, as amended (the "1933 Act") for sales by affiliates of the
issuer ("Rule 144") or any successor U. S. Securities and Exchange Commission
("SEC") rule, Rule 10b-18 of the Securities Exchange Act of 1934, and the
rules of any applicable exchange. To the extent that such is required, the
Company shall prepare a Notice of Proposed Sale of Securities Pursuant to
Rule 144 as specified in Rule 144 ("Form 144") on behalf of the Trust and
submit the Form 144 to the Trustee for review not less than 10 days prior to
the initial sale of Shares that the Company plans to direct (and not less
than 5 days prior to any subsequent sale of Shares requiring a new or amended
Form 144). The Company shall be solely responsible for identifying and
communicating to the Trustee in writing: (i) any other sales of Shares that
must be aggregated with the sales or distributions by the Trust, (ii) all
applicable "black out" periods, if any, (iii) the applicable holding periods,
if any, for the Shares held by the Trustee, and (iv) information regarding
the appropriate tax reporting by the Trustee with respect to any sales or
distributions of Shares (or the proceeds thereof) to any participant or
beneficiary. The Trustee shall have no responsibility or liability with
respect to any broker or dealer designated by the Company. If not so
designated by the Company, the Trustee may select such brokers or dealers.
The Trustee shall be responsible for signing and filing the agreed upon Form
144. The Company further covenants and agrees to furnish or cause to be
furnished to the Trustee, from time to time, such certifications, legal
opinions and additional information as the Trustee may reasonably request in
connection with the Shares or any sale or distribution thereof. In the event
the number of Shares held by the Trust, if any, meets or exceeds any
applicable reporting threshold for the Trust or the Trustee, the Company
agrees to provide written notice to the Trustee that the Trust has reached or
exceeds the reporting threshold and to reimburse the Trustee for its out-of-
pocket costs and expenses associated with preparing and filing any regulatory
report required to be filed by the Trustee, such as, by way of example, Forms
3, 4, 5 or Form 13G filed with the SEC. To the extent not paid by the
Company, such costs and expenses may be deducted by the Trustee from the
Trust to the extent of cash held in the Trust and to the extent not
previously paid by the Company, and any such remaining costs and expenses
shall be paid by the Company.
Section 17. Effective Date. The effective date of this Agreement shall be
the date first above written.
Section 18. Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement, and
shall become
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effective when one or more counterparts have been signed by each of
the parties and delivered to the other party.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE BEAR XXXXXXX COMPANIES INC.
By: /s/ Xxxxxx X. Xxxxxxxx Xx.
------------------------------------
Name: Xxxxxx X. Xxxxxxxx Xx.
Title: Executive Vice President,
Chief Financial Officer and
Chief Operating Officer
WILMINGTON TRUST COMPANY
By: /s/ Xxxxx Xxxx
------------------------------------
Name: Xxxxx Xxxx
Title: Assistant Vice President
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EXHIBIT A
DEFINITIONS
As used in the Agreement, the following terms shall have the meanings set
forth below (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
(a) "Agreement" shall have the meaning given it in the preamble to the
Agreement.
(b) "Award" shall mean any award under a Plan listed on Schedule 1 hereto
which consists of, or entitles the holder thereof to receive upon the payment
of consideration, the passage of time, the fulfillment of conditions or
otherwise, Shares and which may be paid from the Trust, as designated from
time to time by the Company on Schedule 4 hereto.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(d) "Company" shall mean The Bear Xxxxxxx Companies Inc., and, except as
otherwise specified in the Agreement in a particular context, any successor
thereto, whether by merger, consolidation, purchase of substantially all its
assets or otherwise.
(e) "Designated Charity" shall have the meaning given it in Section 15(c)
of the Agreement.
(f) "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
(g) "Fair Market Value" of a Share as of any date means (i) the closing
sales price of a Share on the composite tape for New York Stock Exchange
listed securities on such date, (ii) the closing selling price per Share at
the close of regular trading hours (i.e. before after-hours trading begins)
for NASDAQ Global Select Market (or the NASDAQ Global Market) listed
securities on such date, as such price is reported by The Wall Street Journal
or such other source as the appropriate committee pursuant to the relevant
Plan deems reliable; provided that for so long as any Shares held by the
Trust are not registered with the U.S. Securities and Exchange Commission
(the "SEC") and publicly traded, or are not actively traded in the event that
Shares are or hereafter become registered with the SEC and are publicly
traded, the Company shall engage the services of a reputable, independent
third party to perform valuations (the "Valuation Firm") not less frequently
than annually, and the Trustee may rely for all purposes of this Trust
Agreement on the latest annual valuation provided by the Valuation Firm. The
Company represents and warrants to the Trustee that all information provided
to such party performing valuations by or on behalf of the Company shall be
complete, true and accurate in all material respects and sufficient to enable
the Valuation Firm to perform its valuation services and the Trustee to
provide an accurate account under Section 7.
A-1
(h) "Insolvent" shall have the meaning given it in Section 3(a) of the
Agreement.
(i) "Instruction Schedule" shall mean a schedule provided by the Company
to the Trustee indicating, with respect to a Participant or all Participants,
information which will enable the Trustee to make Payments or solicit
instructions including, without limitation, (i) the number of Awards held by
a Participant which are to be paid from the Trust, (ii) the method in which
amounts due to such Participant are to be paid, (iii) the Withholding Amount
applicable to any Payment to such Participant, (iv) the form and time of
payment of such Payment, and (v) the approved beneficiaries or trustees of
such Participant. Notwithstanding anything in this Exhibit A or the Agreement
to the contrary, the form and time of any Payment shall be determined in
accordance with the relevant Plan and Award agreement and applicable law.
(j) "Participant" shall mean an individual who holds an Award or, with
respect to such individual, a "beneficiary" or "trustee" (as such terms are
defined in the relevant Plan).
(k) "Payment" shall mean a payment from the Trust to a Participant
pursuant to Sections 2(a) or 15(c) of the Agreement.
(l) "Plan" and "Plans" shall have the respective meanings given them in
the first recital to the Agreement.
(m) "Shares" shall have the meaning given it in the second recital to the
Agreement.
(n) "Significant Subsidiaries" shall have the meaning given it in the
third recital to the Agreement.
(o) "Trust" shall have the meaning given it in the third recital to the
Agreement.
(p) "Trustee" shall mean Wilmington Trust Company, a Delaware corporation
that is not affiliated with the Company or its Significant Subsidiaries, or
any successor thereto pursuant to the terms of the Agreement.
(q) "Withholding Amount" shall mean the percentage of any federal, state,
local or foreign taxes to be withheld with respect to any Payment designated
on an Instruction.
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