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| Exhibit 10.15
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This Grantor Trust Agreement (the “Trust Agreement”)
is made this 1st day of April 1999, by and between THE MIDDLEBY CORPORATION
(“the Company”) and WACHOVIA BANK, N.A. (“the
Trustee”).
Recitals
(a)
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| WHEREAS,
the Company has adopted the nonqualified deferred compensation Plans and
Agreements (the "Arrangements") as listed in Attachment 1;
(b)
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| WHEREAS,
the Company has incurred or expects to incur liability under the terms of such
Arrangements with respect to the individuals participating in such Arrangements
(the "Participants and Beneficiaries");
(c)
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| WHEREAS,
the Company hereby establishes a Trust (the "Trust") and shall contribute to
the Trust assets that shall be held therein, subject to the claims of the
Company's creditors in the event of the Company's Insolvency, as herein
defined, until paid to Participants and their Beneficiaries in such manner and
at such times as specified in the Arrangements and in this Trust Agreement;
(d)
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| WHEREAS,
it is the intention of the parties that this Trust shall constitute an unfunded
arrangement and shall not affect the status of the Arrangements as an unfunded
plan maintained for the purpose of providing deferred compensation for a select
group of management or highly compensated employees for purposes of Title I of
the Employee Retirement Income Security Act of 1974; and
(e)
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| WHEREAS,
it is the intention of the Company to make contributions to the Trust to
provide itself with a source of funds (the "Fund") to assist it in satisfying
its Liabilities under the Arrangements.
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 the Trust
(a)
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| The
Trust is intended to be a Grantor Trust, of which the Company is the Grantor,
within the meaning of subpart E, part 1, subchapter J, chapter 1, subtitle A of
the Internal Revenue Code of 1986, as amended, and shall be construed
accordingly.
(b)
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| The
Company shall be considered a Grantor for the purposes of the Trust.
(c)
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| The
Trust hereby established shall become irrevocable ninety days after its
execution.
(d)
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| The
Company hereby deposits with the Trustee in the Trust One Thousand Dollars and
Zero Cents ($1,000.00) which shall become the principal of the Trust to be
held, administered and disposed of by the Trustee as provided in this Trust
Agreement.
(e)
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| 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 and their Beneficiaries shall have no preferred claim on, or any
beneficial ownership interest in, any assets of the Trust. Any rights created
under the Arrangements and this Trust Agreement shall be unsecured contractual
rights of Participants and their Beneficiaries against the Company. Any assets
held by the Trust will be subject to the claims of the general creditors of the
Company under federal and state law in the event the Company is Insolvent, as
defined in Section 3(a) herein.
(f)
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| The
Company, in its sole discretion, may at any time, or from time to time, make
additional deposits of cash or other property acceptable to the Trustee in the
Trust to augment the principal to be held, administered and disposed of by the
Trustee as provided in this Trust Agreement. Prior to a Change of Control,
neither the Trustee nor any Participant or Beneficiary shall have any right to
compel additional deposits.
(g)
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| Immediately
prior to a Change of Control, the Company shall make an irrevocable
contribution to the Trust in an amount that is sufficient to fund the Trust in
an amount equal to no less than 100% but no more than 120% of the amount
necessary to pay each Participant or Beneficiary the benefits to which
Participants or their Beneficiaries would be entitled pursuant to the terms of
the Arrangements as of the date on which the Change of Control occurred. The
Company shall also fund an expense reserve for the Trustee and any contractor
or counsel in an amount equal to the greater of (a) two percent of the trust
balance, or (b) $100,000.00.
Section 2. Payments Participants and Their
Beneficiaries
(a)
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| Prior
to a Change of Control, distributions from the Trust shall be made by the
Trustee to Participants and Beneficiaries at the direction of the Company. The
entitlement of a Participant or his or her Beneficiaries to benefits under the
Arrangements shall be determined by the Company or such party or professional
administrator as it shall designate under the Arrangements as the Company's
agent, and any claim for such benefits shall be considered and reviewed under
the procedures set out in the Arrangements.
(b)
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| The
Company may make payment of benefits directly to Participants or their
Beneficiaries as they become due under the terms of the Arrangements. The
Company shall notify the Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to Participants or their
Beneficiaries. In addition, if the principal of the Trust, and any earnings
thereon, are not sufficient to make payments of benefits in accordance with
the terms of the Arrangements, the Company shall make the balance of each such
payment as it falls due in accordance with the Arrangements. The Trustee shall
notify the Company where principal and earnings are not sufficient. Nothing in
this Agreement shall relieve the Company of its liabilities to pay benefits due
under the Arrangements except to the extent such liabilities are met by
application of assets of the Trust.
(c)
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| Prior
to a Change of Control, the Company shall deliver to the Trustee a schedule of
benefits due under the Arrangements. Subsequent to a Change of Control, the
Trustee shall pay benefits due in accordance with such schedule. After a Change
of Control, the Company shall continue to make the determination of benefits
due to Participants or their Beneficiaries and shall provide the Trustee with
an updated schedule of benefits due. .
(d)
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| The
Trustee agrees that it will not itself institute any action at law or at
equity, whether in the nature of an accounting, interpleading action, request
for a declaratory judgment or otherwise, requesting a court or administrative
or quasi-judicial body to make the determination required to be made by the
Trustee under this Section 2 in the place and stead of the Trustee. The Trustee
may institute an action to collect a contribution due the Trust following a
Change of Control or in the event that the Trust should ever experience a
short-fall in the amount of assets necessary to make payments pursuant to the
terms of the Arrangements.
(e)
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| In
the event any Participant or his or her Beneficiary is determined to be subject
to federal income tax on any amount to the credit of his or her account under
any Arrangement prior to the time of payment hereunder, whether or not due to
the establishment of or contributions to this Trust, a portion of such taxable
amount equal to the federal, state and local taxes (excluding any interest or
penalties) owed on such taxable amount shall be distributed by the Trustee as
soon thereafter as practicable to such Participant or Beneficiary. The Company
shall promptly reimburse the Trust for any such distribution in an amount
certified by the Trustee to be needed for the Participant's benefits. For these
purposes, a Participant or Beneficiary shall be deemed to pay state and local
taxes at the highest marginal rate of taxation in the state in which the
Participant resides or is employed (or both) where a tax is imposed and federal
income taxes at the highest marginal rate of taxation, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes. Such distributions shall be at the direction of the
Company or the Trustee, or upon proper application of the Participant or
Beneficiary; provided that the actual amount of the distribution shall be
determined by the Company prior to a Change of Control and the Trustee
following a Change of Control. An amount to the credit of a Participant's
Account shall be determined to be subject to federal income tax upon the
earliest of: (a) a final determination by the United States Internal Revenue
Service addressed to the Participant or his Beneficiary which is not appealed
to the courts; (b) a final determination by the United States Tax Court or any
other federal court affirming any such determination by the Internal Revenue
Service; or (c) an opinion by the Company's tax counsel, addressed to the
Company and the Trustee, to the effect that by reason of Treasury Regulations,
amendments to the Internal Revenue Code, published Internal Revenue Service
rulings, court decisions or other substantial precedent, amounts to the credit
of Participants hereunder are subject to federal income tax prior to payment.
The
Company
may undertake at its sole expense to defend any tax claims described herein
which are asserted by the Internal Revenue Service against any Participant or
Beneficiary, including attorney fees and cost of appeal, and shall have the
sole authority to determine whether or not to appeal any determination made by
the Service or by a lower court. The Company also agrees to reimburse any
Participant or Beneficiary for any interest or penalties in respect of tax
claims hereunder upon receipt of documentation of same. Any distributions from
the Fund to a Participant or Beneficiary under this Section 2(e) shall be
applied in accordance with the provisions of the Arrangement to reduce the
Company liabilities to such Participant and/or Beneficiary under the
Arrangement with such reductions to be made on a pro-rata basis over the term
of benefit payments under the Arrangement; provided, however, that in no event
shall any Participant, Beneficiary or estate of any Participant or Beneficiary
have any obligation to return all or any part of such distribution to the
Company if such distribution exceeds benefits payable under an Arrangement. Any
reduction in accordance with the foregoing sentence and the Arrangements shall
be determined by the Company prior to a Change of Control. Following a Change
of Control, the Company shall continue to make such determination subject to
the right of a Participant to petition the Trustee under Section 2(c).
Section 3. Trustee Responsibility Regarding
Payments To The Trust Beneficiary When The Company Is Insolvent
(a)
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| The
Trustee shall cease payment of benefits to Participants and their Beneficiaries
if the Company is Insolvent. The Company shall be considered "Insolvent" for
purposes of this Trust Agreement if (i) the Company is unable to pay its debts
as they become due, or (ii) the Company is subject to a pending proceeding as a
debtor under the United States Bankruptcy Code.
(b)
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| At
all times during the continuance of this Trust, the principal and income of the
Trust shall be subject to claims of general creditors of the Company under
federal and state law as set forth below.
| (1)
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| The
Board of Directors and the Chief Executive Officer of the Company shall have
the duty to inform the Trustee in writing that the Company is Insolvent. If a
person claiming to be a creditor of the Company alleges in writing to the
Trustee that the Company has become Insolvent, the Trustee shall determine
whether the Company is Insolvent and, pending such determination, the Trustee
shall discontinue payment of benefits to Participants or their Beneficiaries.
| (2)
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| Unless
the Trustee has actual knowledge that the Company is Insolvent, or has received
notice from the Company or a person claiming to be a creditor alleging that the
Company is Insolvent, the Trustee shall have no duty to inquire whether the
Company is Insolvent. The Trustee may in all events rely on such evidence
concerning the Company's solvency as may be furnished to the Trustee and that
provides the Trustee with a reasonable basis for making a determination
concerning the Company's solvency.
| (3)
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| If
at any time the Trustee has determined that the Company is Insolvent, the
Trustee shall discontinue payments to Participants or their Beneficiaries and
shall hold the assets of the Trust for the benefit of the Company's general
creditors. Nothing in this Trust Agreement shall in any way diminish any rights
of Participants or their Beneficiaries to pursue their rights as general
creditors of the Company with respect to benefits due under the Arrangements or
otherwise.
| (4)
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| The
Trustee shall resume the payment of benefits to Participants or their
Beneficiaries in accordance with Section 2 of this Trust Agreement only after
the Trustee has determined that the Company is not Insolvent (or is no longer
Insolvent).
(c)
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| Provided
that there are sufficient assets, if the Trustee discontinues the payment of
benefits from the Trust pursuant to Section 3(b) hereof and subsequently
resumes such payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Participants or their
Beneficiaries under the terms of the Arrangements for the period of such
discontinuance, less the aggregate amount of any payments made to Participants
or their Beneficiaries by the Company in lieu of the payments provided for
hereunder curing any such period of discontinuance.
Section 4. Payments if a Short-Fall of The Trust
Assets Occurs
(a)
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| If
there are not sufficient assets for the payment of benefits pursuant to Section
2 or Section 3(c) hereof and the Company does not otherwise make such payments
within a reasonable time after demand from the Trustee, the Trustee shall make
payment of benefits from the Trust to the Participants or their Beneficiaries
in the following order of priority:
| (1)
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| retired
Participants and their Beneficiaries;
| (2)
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| vested
Participants over the age of 55 who were terminated within two years following
a Change of Control and their Beneficiaries-,
| (3)
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| vested
active Participants over the age of 55 and their Beneficiaries;
| (4)
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| any
other vested active Participants and their Beneficiaries;
| (5)
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| vested
former Participants and their Beneficiaries; and
| (6)
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| non-vested
Participants and their Beneficiaries
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(b)
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| Within
each category set forth under Section 4(a), payments shall be paid in a pro
rata manner.
(c)
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| Upon
receipt of a contribution from the Company necessary to make up for a shortfall
in the payments due, the Trustee shall resume payments to all the Participants
and Beneficiaries under the Arrangements. Following a Change of Control, the
Trustee shall
have
the right to compel a contribution to the Trust from the Company to make-up for
any shortfall.
Section 5. Payments to the CompanyExcept as provided in Sections 3, 8, and 14 hereof, the Company
shall have no right or power to direct the Trustee to return to the Company or
to divert to others any of the Trust assets before all payment of benefits have
been made to Participants and their Beneficiaries pursuant to the terms of the
Arrangements.
Section 6. Investment Authority
(a)
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| The
Trustee shall not be liable in discharging its duties hereunder, including
without limitation its duty to invest and reinvest the Fund, if it acts for the
exclusive benefit of the Participants and their Beneficiaries, in good faith
and as a prudent person would act in accomplishing a similar task and in
accordance with the terms of this Trust Agreement and any applicable federal or
state laws, rules or regulations.
(b)
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| Subject
to investment guidelines agreed to in writing from time to time by the Company
and the Trustee prior to a Change of Control, the Trustee shall have the power
in investing and reinvesting the Fund in its sole discretion:
| (1)
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| To
invest and reinvest in any readily marketable common and preferred stocks,
bonds, notes, debentures (including convertible stocks and securities but not
including any stock or security of other than a de minimus amount held in a
collective or mutual fund), certificates of deposit or demand or time deposits
(including any such deposits with the Trustee) and shares of investment
companies and mutual funds, without being limited to the classes or property in
which the Trustees are authorized to invest by any law or any rule of court of
any state and without regard to the proportion any such property may bear to
the entire amount of the Fund;
| (2)
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| To
commingle for investment purposes all or any portion of the Fund with assets of
any other similar trust or trusts established by the Company with the Trustee
for the purpose of safeguarding deferred compensation or retirement income
benefits of its employees and/or directors;
| (3)
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| To
retain any property at any time received by the Trustee;
| (4)
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| To
sell or exchange any property held by it at public or private sale, for cash or
on credit, to grant and exercise options for the purchase or exchange thereof,
to exercise all conversion or subscription rights pertaining to any such
property and to enter into any covenant or agreement to purchase any property
in the future;
| (5)
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| To
participate in any plan of reorganization, consolidation, merger, combination,
liquidation or other similar plan relating to property held by it 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 person;
| (6)
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| To
deposit any property held by it with any protective, reorganization or similar
committee, to delegate discretionary power thereto, and to pay part of the
expenses and compensation thereof any assessments levied with respect to any
such property to deposited;
| (7)
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| To
extend the time of payment of any obligation held by it;
| (8)
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| To
hold uninvested any moneys received by it, without liability for interest
thereon, but only in anticipation of payments due for investments,
reinvestments, expenses or disbursements;
| (9)
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| To
exercise all voting or other rights with respect to any property held by it and
to grant proxies, discretionary or otherwise;
| (I0)
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| For
the purposes of the Trust, to borrow money from others, to issue its promissory
note or notes therefor, and to secure the repayment thereof by pledging any
property held by it;
| (11)
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| To
employ suitable contractors and counsel, who may be counsel to the Company or
to the Trustee, and to pay their reasonable expenses and compensation from the
Fund to the extent not paid by the Company;
| (12)
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| To
register investments in its own name or in the name of a nominee; to hold any
investment in bearer form; and to combine certificates representing securities
with certificates of the same issue held by it in other fiduciary capacities or
to deposit or to arrange for the deposit of such securities with any
depository, even though, when so deposited, such securities may be held in the
name of the nominee of such depository with other securities deposited
therewith by other persons, or to deposit or to arrange for the deposit of any
securities issued or guaranteed by the United States government, or any agency
or instrumentality thereof, including securities evidenced by book entries
rather than by certificates, with the United States Department of the Treasury
or a Federal Reserve Bank, even though, when so deposited, such securities may
not be held separate from securities deposited therein by other persons;
provided, however, that no securities held in the Fund shall be deposited with
the United States Department of the Treasury or a Federal Reserve Bank or other
depository in the same account as any individual property of the Trustee, and
provided, further, that the books and records of the Trustee shall at all times
show that all such securities are part of the Trust Fund;
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