Exhibit 10.21
TRUST AGREEMENT
THIS TRUST AGREEMENT, made and entered into as of April 1,
1992, between USAir Inc., a Delaware corporation with its principal
address at Crystal Park Four, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ (the "Company") and Wachovia Bank of North Carolina, N.A.
with its principal address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇,
▇▇ ▇▇▇▇▇, (the "Trustee");
W I T N E S E T H T H A T :
WHEREAS, the Company has entered into an agreement with its
Executive Vice President-Marketing, W. ▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Executive") to provide certain payments to him in the future if
certain conditions are met; and
WHEREAS, the terms of the agreement between the Company and
the Executive provides for the Company to set aside in a trust
sufficient assets to satisfy its contractual liability under the
agreement;
NOW THEREFORE, in consideration of the promises and of the
mutual covenants herein contained, the Company and the Trustee
agree as follows.
SECTION 1
Establishment of Trust
1.1 Trust Fund. The Company hereby establishes with the
Trustee a trust (the "Trust") to hold such cash and other property
which may be delivered to the Trustee from time to time by the
Company. All such assets contributed by the Company to the Trust,
together with all earnings, profits, proceeds, investments or
reinvestments of such assets, less all payments and charges as
authorized herein, shall constitute and hereinafter be referred to
as the "Trust Fund." The Trust Fund shall be held by the Trustee
in trust and shall be held, managed and administered by the Trustee
in accordance with the terms of this Trust Agreement.
1.2 Acceptance of Trust. The Trustee accepts the Trust
established under this Trust Agreement on the terms and subject to
the provisions set forth herein, and it agrees to discharge and
perform fully and faithfully all of the duties and obligations
imposed upon it under this Trust Agreement. The Trustee shall act
with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man acting in a like
capacity and familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims; provided,
however, that the Trustee shall incur no liability for any action
taken by it pursuant to direction from the Company.
1.3 Limitations on the Use of Trust Fund. The assets of the
Trust Fund shall not be returned to the Company or used for any
purpose other than the exclusive purpose of providing payments to
the Executive and defraying reasonable expenses of administration
of the Trust until all payments to the Executive as required by
this Trust Agreement have been made; provided, however, that (a)
nothing in this Section 1.3 shall be deemed to limit or otherwise
prevent the payment from the Trust Fund of expenses and other
charges incurred by the Trust or the Trustee as authorized in this
Trust Agreement, and (b) excess assets may be paid out to the
Company pursuant to Section 9.1 of this Trust Agreement
1.4 Irrevocability. The Company and the Trustee agree that
the Trust created herein shall not be revocable by the Company or
any successor thereto.
1.5 Grantor Trust. The Trust established by this Trust
Agreement is intended to be classified as a "grantor trust" as that
term is defined by Section 671 of the Internal Revenue Code of 1986
for purposes of the Trust's income taxes with the result that (a)
the Executive shall not have any taxable income on any assets of
the Trust Fund until such time as and only to the extent that the
Executive has a vested interest in such assets; and (b) the income
of the Trust be treated as income of the Company.
SECTION 2
Definitions
2.1 "Board" shall mean the Board of Directors of USAir, Inc.
2.2 "Change of Control" shall have the meaning set forth in
the employment agreement entered into between the Company and the
Executive, dated as of February 7, 1992, a copy of which has been
appended hereto as Attachment 1.
2.3 "Committee" shall mean the Compensation and Benefits
Committee of the Board.
2.4 "Company" shall mean USAir, Inc., its successors and
assigns.
2.5 "Executive" shall mean W. ▇▇▇▇▇▇ ▇▇▇▇▇, Executive Vice
President-Marketing of the Company.
2.6 "Trustee" shall mean Wachovia Bank of North Carolina,
N.A.
2
SECTION 3
Payment Obligations
3.1 Payment Obligations. The Company has promised the
Executive a One Million Dollar ($1,000,000) incentive payment in
which the Executive is to become vested over a period of four years
as further described below. The Executive shall become vested and
have a nonforfeitable interest in 25% of the One Million Dollars
($1,000,000) on each anniversary of his employment, provided he
remains in the employ of the Company, until he has received a total
of One Million Dollars ($1,000,000) and shall receive payment of
vested amounts within 10 days of its vesting. The Executive shall
be entitled to receive four installment payments at such times and
in such amounts as set forth in the following schedule:
Amount Date Vested Payment Date
-------- ---------------- -----------------
$250,000 February 7, 1993 February 17, 1993
$250,000 February 7, 1994 February 17, 1994
$250,000 February 7, 1995 February 17, 1995
$250,000 February 7, 1996 February 17, 1996
3.2 Normal Payment Schedule. Upon receipt of written
instructions from the Company, the Trustee shall pay to the
Executive Two Hundred Fifty Thousand Dollars ($250,000) in one cash
lump sum on the payment dates set forth in Section 3.1. Upon
making such payments to the Executive the Trustee shall withhold
for and make payment of all taxes to the appropriate taxing
authority and shall furnish the Executive or other beneficiary with
the appropriate tax information form evidencing such payment and
the amount thereof.
3.3 Payment Following a Change of Control. Following the
Trustee's determination that a Change of Control has occurred, and
in the event that the Executive's employment with the Company has
been terminated, the Executive shall become 100% vested in the
remaining payments and the Trustee shall, without direction from
the Company, immediately distribute to the Executive, in one lump
sum, all remaining payments. The Trustee shall, concurrently with
the distribution of the Executive's account, advise the General
Counsel and Chief Financial Officer of the Company of the amount
paid to the Executive hereunder. The Trustee shall be indemnified
and held harmless by the Company in making a payment pursuant to
this Section 3.3. If the Trustee so desires, it may, in its sole
discretion, make such additional inquiries or take such other steps
as it deems necessary to carry out the intent and purposes of this
3
Trust Agreement. The Trustee may engage its own counsel or other
experts to assist it in making its determination. The cost of such
counsel or other expert assistance, and any other costs reasonably
incurred by the Trustee in making its determination shall be borne
by the Company. If the Company fails to pay any such fees and
expenses when due, the Trustee may use the assets of the Trust to
pay the fees and expenses and demand reimbursement to the Trust
from the Company. If such demand is not met, the Trustee may
commence an action against the Company on behalf of the Trust.
Following a Change of Control, the Trustee shall owe its fiduciary
duties to the Executive and shall exercise it powers hereunder
solely for the benefit of the Executive.
3.4 Payment in the Event of the Executive's Termination. In
the event that the Executive's employment with the Company is
terminated for any reason the Executive shall have no further
entitlement to any additional payments other than for amounts which
vested prior to his termination, and all remaining assets in the
Trust shall revert to the Company. The foregoing sentence shall
not apply in the event the termination follows a Change of Control
or in the event that the Executive's employment is terminated by
reason of death or disability. In the event of a termination
following a Change of Control, Section 3.3 above shall control. In
the event of the Executive's death or disability, the scheduled
payments shall continue to be made to such beneficiary as may be
designated by the Executive, or in the event that no beneficiary is
designated, to the Executive's estate, on the payment dates set
forth in the schedule set forth in Section 3.1.
3.5 Company Obligation. Notwithstanding the provisions of
this Trust Agreement, the Company shall remain obligated to pay the
amounts promised to the Executive in the event that the Trust
assets are insufficient to cover the obligations when they become
due.
SECTION 4
Contributions
4.1 Initial Contribution. Concurrent with the execution and
delivery of this Trust Agreement, the Company shall deliver to the
Trustee One Million Dollars ($1,000,000) in assets to form the
corpus of the Trust. No future contributions will be required by
the Company unless the assets remaining in the Trust are
insufficient to meet the Company's payment obligation as set forth
in Section 3. The Trustee shall notify the Company promptly after
any valuation of the assets in which it is determined that the
remaining assets are insufficient to make the remaining payments as
4
set forth in Section 3. In the event that the Company is notified
by the Trustee that the Trust assets are insufficient to meet a
payment obligation, the Company shall make an additional
contribution to the Trust within 15 days to the level required to
make all remaining payments.
4.2 Form of Contributions. The Company shall make its
contributions in cash.
SECTION 5
Trustee Powers and Authority
5.1 Investment Power. The Trustee shall invest and reinvest
the principal and income of the Trust Fund and keep the Trust Fund
invested, without distinction between principal and income, in
accordance with the directions of the Company or such investment
guidelines as the Company may provide to the Trustee from time to
time; provided, however, that the assets may not be invested in
securities or debt obligations issued by the Company or its parent
corporation, USAir Group, Inc.
5.2 Additional Powers. Subject to the provisions of Section
5.1, the Trustee shall have the following powers and authority in
the administration of the Trust:
(a) To sell, exchange, transfer or otherwise dispose of any
such property at public or private sale for cash or on credit and
grant options for the purchase or exchange of any securities or
other property held in the Trust Fund.
(b) To participate in any plan of reorganization,
consolidation, merger, combination, liquidation or other similar
plan relating to any such property, and to consent to or oppose any
such plan or any action thereunder, or any contract, lease,
mortgage, purchase, sale or other action by any corporation or
other entity.
(c) To deposit any such property with any protective,
reorganization or similar committee; to delegate discretionary
power to any such committee; and to pay part of the expenses and
compensation of any such committee and any assessments levied with
respect to any property so deposited.
5
(d) To exercise any conversion privilege or subscription
right available in connection with any such property; to oppose or
to consent to the reorganization, consolidation, merger or
readjustment of the finances of any corporation, company or
association, or to the sale, mortgage, pledge or lease of the
property of any corporation, company or association of any of the
securities of which may at any time be held in the Trust Fund and
to do any act with reference thereto, including the exercise of
options, the making of agreements or subscriptions and the payment
of expenses, assessments or subscriptions, which may be deemed
necessary or advisable in connection therewith, and to hold and
retain any securities or other property which it may so acquire.
(e) To commence or defend suits or legal proceedings and to
represent the Trust in all suits or legal proceedings; to settle,
compromise or submit to arbitration, any claims, debts or damages,
due or owing to or from the Trust.
(f) To exercise, personally or by general or limited power of
attorney, any right, including the right to vote, appurtenant to
any securities or other such property.
(g) 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 and to pledge any securities or
other property for the repayment of any such loan.
(h) To engage any legal counsel, including counsel to the
Company or the Trustee, any enrolled actuary, or any other suitable
agents, to consult with such counsel, enrolled actuary, or agents
with respect to the construction of the Trust Agreement, the duties
of the Trustee hereunder, the transactions contemplated by this
Trust Agreement or any act which the Trustee proposes to take or
omit, to rely upon the advice of such counsel, enrolled actuary or
agents, and to pay its reasonable fees, expenses and compensation.
(i) 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, to deposit or
arrange for the deposit of any such securities with such a system
and to hold any securities in bearer form.
6
(j) To make, execute and deliver, as Trustee, any and all
deeds, leases, notes, bonds, guarantees, mortgages, conveyances,
contracts, waivers, releases or other instruments in writing
necessary or proper for the accomplishment of any of the foregoing
powers or to appoint an ancillary trustee for the accomplishment of
the foregoing powers.
(k) To transfer assets of the Trust Fund to a successor
trustee as provided in Section 7.4.
(l) To exercise, generally, any of the powers which an
individual owner might exercise in connection with property either
real, personal or mixed held by the Trust Fund, and to do all other
acts that the Trustee may deem necessary or proper to carry out any
of the powers set forth in this Section 5 or otherwise in the best
interests of the Trust Fund.
(m) To do all acts, whether or not expressly authorized,
which the Trustee may deem necessary or desirable for the
protection of the Trust.
SECTION 6
Administration and Records
6.1 Responsibility to Keep Records. The Trustee shall keep
accurate and detailed accounts of any investments, receipts,
disbursements and other transactions hereunder. All accounts,
books and records shall be open to inspection and audit at all
reasonable times by any person designated by the Company. In the
event of the removal or resignation of the Trustee, the Trustee
shall promptly deliver to the successor trustee all records which
shall be required by the successor trustee to enable it to carry
out the provisions of this Trust Agreement.
6.2 Reports. Within 25 days after the close of each calendar
year and within 30 days after the removal or resignation of the
Trustee or the termination of the Trust, the Trustee shall file
with the Company a written account setting forth all investments,
receipts, disbursements and other transactions effected by it
during the preceding calendar year, or during the period from the
close of the preceding calendar year to the date of such removal,
resignation or termination.
7
6.3 Taxes and Expenses. The Company shall pay any taxes
which at any time are lawfully levied or assessed or become payable
with respect to assets in the Trust Fund. To the extent that any
taxes lawfully levied are not paid by the Company, the Trustee
shall pay such taxes out of the Trust Fund. Any taxes levied or
assessed against the Executive with respect to assets paid out of
the Trust to the Executive shall be the sole responsibility of the
Executive. The Company shall also pay the reasonable expenses
incurred by the Trustee in the performance of its duties under this
Trust Agreement. Such expenses shall be paid from the Trust Fund
to the extent that the Company does not pay them.
6.4 Trustee's Compensation. The Trustee shall be paid by the
Company reasonable compensation for its services in accordance with
the Trustee's regular schedule of fees for trust services as shall
from time to time be in effect, unless otherwise agreed to by the
Company and the Trustee. A copy of the Trustee's fee schedule is
appended to this Trust Agreement as Attachment 2. The Trustee
shall notify the Company in writing at least 60 days in advance of
the effective date of a change in the fee schedule. Such
compensation for the Trustee shall be paid from the Trust Fund to
the extent that the Company does not pay it.
6.5 Protection of Trustee. The Trustee shall be fully
protected in relying upon any instruction, direction or approval of
the Company if certified in writing by a designated representative
of the Company. In addition to the foregoing, the Company hereby
agrees to indemnify and hold harmless the Trustee from and against
all losses, damages, costs, expenses and liabilities including
reasonable attorneys fees and other costs of litigation, to which
the Trustee may become subject, arising out of or occasioned by or
incurred in connection with or in any way associated with this
Trust, including any claim brought against the Trustee by the
Company or its successor, except for any claim arising from an act
or omission due to the Trustee's gross negligence or willful
misconduct.
SECTION 7
Resignation and Removal
7.1 Removal. The Company may, at any time, remove the
Trustee with or without cause upon giving at least 60 days' notice
in writing to the Trustee, unless such notice requirement is waived
by the Trustee in writing; provided, however, that in the event of
a Change of Control, the Company may only remove the Trustee with
the written consent of the Executive.
8
7.2 Resignation. The Trustee may resign at any time upon
giving at least 60 days' notice in writing to the Company.
7.3 Final Accounting. In the event of such removal or
resignation, the Trustee shall duly file with the Company a written
account as provided in Section 6.2 of this Trust Agreement for the
period since the previous annual accounting.
7.4 Successor Trustee. Within 60 days after any such notice
of removal or resignation of the Trustee, the Company shall
designate a successor trustee. Such successor trustee shall have
the powers and duties herein conferred upon the Trustee and the
word "Trustee" wherever used herein, except when the context
otherwise requires, shall be deemed to include any successor
trustee. Upon designation of a successor trustee and delivery to
the resigned or removed Trustee notice of written acceptance by the
successor trustee of such designation, such resigned or removed
Trustee shall promptly assign, transfer, deliver and pay over to
such successor trustee, in conformity with the requirements of
applicable law, the funds and properties in its control or
possession then constituting the Trust Fund.
SECTION 8
Termination and Amendment of the Trust
8.1 Termination Upon Tax Determination. Notwithstanding
anything contained in this Trust Agreement to the contrary, if at
any time the Trust is finally determined by the Internal Revenue
Service ("IRS") not to be a "grantor trust" with the result that
the income of the Trust Fund is not treated as income of the
Company, or if a tax is finally determined by the IRS to be
payable by the Executive with respect to any payment obligation
under the Trust Fund prior to the Executive's interest in such
payment obligation becoming vested, then the Trust shall
immediately terminate and the full fair market value of the assets
in the Trust Fund shall be returned to the Company. The Company
shall fully reimburse the Executive for any tax liability he may
incur with respect to assets in the Trust prior to the payment or
vesting of such assets. For purposes of this Section 8.1, a final
determination of the IRS shall be a decision rendered by the IRS
which is no longer subject to administrative appeal within the IRS.
8.2 Termination Upon Total Distribution of Assets. The Trust
shall terminate when all payments which have or may become payable
pursuant to the terms of the Trust have been made. Upon
termination of the Trust any remaining assets shall be paid by the
Trustee to the Company.
9
8.3 Amendments. With the consent of the Trustee, the Company
may from time to time amend or modify, in whole or in part, any of
the provisions of this Trust Agreement; provided, however, that
such amendment shall not adversely affect the rights of the
Executive; and provided, further, that no such amendment shall be
allowed following the occurrence of a Change of Control.
SECTION 9
Return of Assets
9.1 Excess Assets. Prior to termination of the Trust and
prior to the occurrence of a Change of Control, if the total assets
of the Trust Fund exceed the amount required to pay all remaining
payment obligations under Section 3.1, then such amount shall be
deemed to be "excess assets." The Trustee shall determine in its
sole discretion the amount of any excess assets and return such
amount to the Company. Such determination shall be made by the
Trustee on an annual basis and any "excess assets" shall be
returned to the Company within 45 days following the close of the
calendar year. Notwithstanding the foregoing, if the Trust
terminates pursuant to Section 8.2 as a result of the Company's
payment obligations becoming fully satisfied, all assets shall be
returned to the Company as soon as practicable.
SECTION 10
Miscellaneous
10.1 Non-Alienation. No amount payable to or in respect of
the Executive shall be subject in any manner to alienation by
anticipation, sale, transfer, assignment, bankruptcy, pledge,
attachment, or encumbrance of any kind and any attempt to do so
shall be void. The Trust Fund shall in no manner be liable for or
subject to the debts or liabilities of the Executive.
10.2 Governing Law. This Trust Agreement and the Trust
hereby created shall be governed by the laws of the State of North
Carolina.
10.3 Communications. Communications to the Company shall be
addressed to:
USAir Group, Inc.
Crystal Park Four
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel or Chief Financial
Officer or their designee
10
Communications to the Trustee shall be addressed to :
Wachovia Bank of North Carolina, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ - Vice President or her
designee
10.4 Titles and headings. The titles of the Sections and the
Section headings in this Trust Agreement are placed herein for
convenience of reference only and shall not control the meaning or
interpretation of any provision of this Trust Agreement.
10.5 Assignment. This Trust Agreement may not be assigned by
either party without the prior written consent of the other and any
purported assignment without such prior written consent shall be
null and void.
10.6 Successors. This Trust Agreement shall be binding upon
and inure to the benefit of the Company and the Trustee and their
respective successors.
10.7 Severability. In the event that any provision of this
Trust Agreement shall be determined by a court to be invalid or
unenforceable, the remainder of this Trust Agreement shall not be
affected thereby.
11
IN WITNESS WHEREOF, this Trust Agreement has been duly
executed by the parties hereto as of April 1, 1992.
USAIR, INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
______________________________
Title: Senior Vice President-
Human Resources
Attest:
/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
______________________________
Secretary
WACHOVIA BANK OF NORTH CAROLINA,
N.A., TRUSTEE
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________
Title: Senior Vice President
________________________
Attest:
/s/▇▇▇▇▇ ▇▇▇▇▇▇
_________________________
Secretary
12