SIXTH AMENDMENT TO TRUST AGREEMENT BETWEEN FIDELITY MANAGEMENT TRUST COMPANY AND THE SCOTTS COMPANY
EXHIBIT 10.5(b)(vii)
THIS SIXTH AMENDMENT, effective as of the date first signed below, by and between Fidelity
Management Trust Company (the “Trustee”) and The Scotts Company (the “Sponsor”);
WINESSETH:
WHEREAS, the Trustee and the Sponsor heretofore entered into a Trust Agreement dated January
1, 1998 with regard to The Scotts Company Executive Retirement Plan (the “Plan”); and
WHEREAS, the Trustee and the Sponsor now desire to amend said Trust Agreement as provided for
in Section 14 thereof;
NOW THEREFORE, in consideration of the above premises, the Trustee and the Sponsor hereby
amend the Trust Agreement by:
| (1) | Restating Section 4(e) in its entirety, as follows: |
(e) Sponsor Stock. Trust investments in Sponsor Stock shall be made via the
Sponsor Stock Fund (the “Stock Fund”). Investments in the Stock Fund shall consist
primarily of shares of Sponsor Stock. The Stock Fund shall also include cash or short-term
liquid investments, in accordance with this paragraph, in amounts designed to satisfy daily
exchange or withdrawal requests. Such holdings will include Colchester Street Trust: Money
Market Portfolio: Class I or such other Mutual Fund as agreed to in writing by the Sponsor
and Trustee. The Sponsor shall, after consultation with the Trustee, establish and
communicate to the Trustee in writing a target percentage and drift allowance for such
short-term liquid investments. Subject to its ability to execute open-market trades in
Sponsor Stock or to otherwise trade with the Sponsor, the Trustee shall be responsible for
ensuring that the short-term investments held in the Stock Fund falls within the agreed-upon
range over time. Each Participant’s proportional interest in the Stock Fund shall be
measured in units of participation, rather than shares of Sponsor Stock. Such units shall
represent a proportionate interest in all of the assets of the Stock Fund, which includes
shares of Sponsor Stock, short-term investments and at times, receivables and payables (such
as receivables and payables arising out of unsettled stock trades). The Trustee shall
determine a daily net asset value (“NAV”) for each unit outstanding of the Stock Fund.
Valuation of the Stock Fund shall be based upon: (a) the closing price of the stock on the
principal national securities exchange on which the Sponsor Stock is traded; (b) if
unavailable, the latest available price as reported by the principal national securities
exchange on which the Sponsor Stock is traded (the “Closing Price”); or (c) if neither is
available, the price determined in good faith by the Trustee. The NAV shall be adjusted for
gains or losses realized on sales of Sponsor Stock, appreciation or depreciation in the
value of those shares owned, dividends paid on
Sponsor Stock to the extent not used to purchase additional units of the Stock Fund for
affected participants, and interest on the short-term investments held by the Stock Fund,
payables and receivables for pending stock trades, receivables for dividends not yet
distributed, and payables for other expenses of the Stock Fund, including principal
obligations, if any, and expenses that, pursuant to Sponsor direction, the Trustee accrues
or pays from the Stock Fund.
(i) Acquisition Limit. Pursuant to the Plan, the Trust may be invested in
Sponsor Stock to the extent necessary to comply with investment directions in accordance
with this Agreement. The Sponsor shall be responsible for providing specific direction on
any acquisition limits required by the Plan or applicable law.
(ii) Fiduciary Duty. The Sponsor shall continually monitor the suitability of
acquiring and holding Sponsor Stock. The Trustee shall not be liable for any loss or
expense which arises from the directions of the Sponsor with respect to the acquisition and
holding of Sponsor Stock, unless it is clear on their face that the actions to be taken
under those directions would be prohibited by any applicable law or would be contrary to the
terms of this Agreement
(iii) Purchases and Sales of Sponsor Stock. Unless otherwise directed by the
Sponsor in writing pursuant to directions that the Trustee can administratively implement,
the following provisions shall govern purchases and sales of Sponsor Stock.
(A) Open Market Purchases and Sales. Purchase and sales of Sponsor Stock shall
be made on the open market in accordance with the Trustee’s standard trading guidelines, as
they may be amended by the Trustee from time to time, as necessary to honor exchange and
withdrawal activity and to maintain the target cash percentage and drift allowance for the
Stock Fund, provided that:
(1) If the Trustee is unable to purchase or sell the total number of shares required to
be purchased or sold on such day as a result of market conditions; or
(2) If the Trustee is prohibited by the Securities and Exchange Commission, the New
York Stock Exchange or principal exchange on which the Sponsor Stock is traded, or any other
judicial or regulatory body from purchasing or selling any or all of the shares required to
be purchased or sold on such day, then the Trustee shall purchase or sell such shares as
soon thereafter as administratively feasible.
(B) Purchases and Sales from or to Sponsor. If directed by the Sponsor in
writing prior to the trading date, the Trustee may purchase or sell Sponsor Stock from or to
the Sponsor if the purchase or sale is for adequate consideration and no commission is
charged. If Sponsor contributions (employer) or contributions made by the Sponsor on behalf
of the Participants (employee) under the Plan are to be invested in Sponsor Stock, the
Sponsor may transfer Sponsor Stock in lieu of cash to the Trust. In either case, the number
of shares to be transferred will be determined by dividing the total
amount of Sponsor Stock to be purchased or sold by the Closing Price of the Sponsor
Stock on the trading date.
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(C) Use of Brokers. The Named Fiduciary hereby directs the Trustee to use such
brokers as the Trustee deems appropriate to provide brokerage services in connection with
any purchase or sale of Sponsor Stock in accordance with directions from Participants.
Commissions on the purchase and sale of Sponsor Stock shall be charged back to the Sponsor
Stock Fund.
(iv) Execution of Purchases and Sales of Units. Unless otherwise directed in
writing pursuant to directions that the Trustee can administratively implement, purchases
and sales of units shall be made as follows:
(A) Subject to subparagraphs (B) and (C) below, purchases and sales of units in the
Stock Fund (other than for exchanges) shall be made on the date on which the Trustee
receives from the Administrator in good order all information, documentation, and wire
transfers of funds (if applicable), necessary to accurately effect such transactions.
Exchanges of units in the Stock Fund shall be made in accordance with the Exchange
Guidelines attached hereto as Schedule “D”.
(B) Aggregate sales of units in the Stock Fund on any day shall be limited to the Stock
Fund’s Available Liquidity for that day. For these purposes, Available Liquidity shall mean
the amount of short-term investments held in the fund decreased by any outgoing cash for
expenses then due, and obligations for pending stock purchases, and increased by incoming
cash (such as contributions, exchanges in) and to the extent credit is available and
allocable to the Stock Fund, receivables for pending stock sales. In the event that the
requested sales exceed the Available Liquidity, then transactions shall be processed giving
precedence to distributions and withdrawals, and otherwise on a first-in first-out (FIFO)
basis, as provided in Schedule “F” (the “Specified Hierarchy”). So long as the Stock Fund
is open for such transactions, sales of units that are requested but not processed on a
given day due to insufficient Available Liquidity shall be suspended until Available
Liquidity is sufficient to honor such transactions in accordance with the Specified
Hierarchy.
(C) The Trustee shall close the Stock Fund to sales or purchases of units, as
applicable, on any date on which trading in the Sponsor Stock has been suspended or
substantial purchase or sale orders are outstanding and cannot be executed.
(v) Securities Law Reports. The Sponsor shall be responsible for filing all
reports required under Federal or state securities laws with respect to the Trust’s
ownership of Sponsor Stock, including, without limitation, any reports required under
section 13 or 16 of the Securities Exchange Act of 1934, and shall immediately notify the
Trustee in writing of any requirement to stop purchases or sales of Sponsor Stock pending
the filing of any report. The Trustee shall provide to the Sponsor such information on the
Trust’s ownership of Sponsor Stock as the Sponsor may reasonably request in order to comply
with Federal or state securities laws.
(vi) Voting and Tender Offers. Notwithstanding any other provision of this
Agreement, the provisions of this Section shall govern the voting and tendering of
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Sponsor Stock. The Administrator shall provide direction to the Trustee with respect to any annual
or special meeting, any tender or exchange offer, or any other similar shareholder right,
and the Trustee shall vote, tender or exchange shares of Sponsor Stock in accordance with
timely, written direction from the Administrator. Unless otherwise required by applicable
law, the Trustee shall not take any action with respect to vote, tender, exchange or similar
shareholder right in the absence of instruction from the Administrator. For these purposes,
a timely direction is one that is received at a time that reasonably allows the Trustee to
exercise its rights, through a custodian if applicable.
(vii) General. With respect to all rights other than the right to vote, the
right to tender, and the right to withdraw shares previously tendered, in the case of
Sponsor Stock attributable to a Participant’s hypothetical investment in the Stock Fund, the
Trustee shall follow the directions of the Participant and if no such directions are
received, the directions of the Sponsor. The Trustee shall have no duty to solicit
directions from Participants. With respect to all rights other than the right to vote and
the right to tender, in the case of Sponsor Stock that is not attributable to a
Participant’s hypothetical investment in Sponsor Stock, the Trustee shall follow the
directions of the Sponsor.
(viii) Conversion. All provisions in this Section 4(e) shall also apply to any
securities received as a result of a conversion of Sponsor Stock.
| (2) | Restating Schedule “D” in its entirety as attached hereto. | ||
| (3) | Adding Schedule “F” as attached hereto. |
IN WITNESS WHEREOF, the Trustee and the Sponsor have caused this Sixth Amendment to be
executed by their duly authorized officers effective as of the day and year first signed below.
| THE SCOTTS COMPANY | FIDELITY MANAGEMENT TRUST COMPANY |
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By:
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/s/ Xxxxx Xxxxxxx 11/29/01 | By: | /s/ Xxxxxxx Xxxxxx | 12/20/01 | ||||||||
| Date | Vice President | Date | ||||||||||
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SCHEDULE “D”
EXCHANGE GUIDELINES
The following exchange guidelines are currently employed by Fidelity Investments Institutional
Operations Company, Inc. (FIIOC).
Exchange hours, via a Fidelity Participant service representative, are 8:30 a.m. (ET) to 8:00 p.m.
(ET) on each business day. A “business day” is any day on which the New York Stock Exchange (NYSE)
is open.
Exchanges via the Internet (NetBenefits) may be made virtually 24 hours a day.
Exchanges via Voice Response System (“VRS”) may be made virtually 24 hours a day.
FIIOC reserves the right to change these exchange guidelines at its discretion.
Note: The NYSE’s normal closing time is 4:00 p.m. (ET); in the event the NYSE alters its dosing
time, all references below to 4:00 p.m. (ET) shall mean the NYSE closing time as altered.
Exchanges Between Mutual Funds
Participants may contact Fidelity on any day to exchange between mutual funds. If the
request is confirmed before the close of the market (generally, 4:00 p.m. ET) on a business
day, it will receive that day’s trade date. Requests confirmed after the close of the
market on a business day (or on any day other than a business day) will be processed on a
next day basis.
Sponsor Stock Fund
Provided that the Sponsor Stock Fund is open for purchases and sales of units, the following
rules will govern exchanges:
Exchanges From Mutual Funds to Sponsor Stock Fund
Participants may contact Fidelity on any day to exchange from mutual funds into the Sponsor
Stock Fund. If the request is confirmed before the close of the market (generally, 4:00
p.m. ET) on a business day, it will receive that day’s trade date. Requests confirmed after
the close of the market on a business day (or on any day other than a business day) will be
processed on a next business day basis.
Exchanges From Sponsor Stock Fund to Mutual Funds
Participants may contact Fidelity on any day to exchange from the Sponsor Stock Fund to
mutual funds. If Fidelity receives the request before the close of the market (generally
4:00 p.m. ET) on any business day and Available Liquidity is sufficient to honor the trade
after Specified Hierarchy rules are applied, it will receive that day’s trade date.
Requests received by Fidelity after the close of the market on any business day (or on any
day
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other than a business day) will be processed on a next business day basis, subject to
Available Liquidity for such day after application of Specified Hierarchy rules. If
Available Liquidity on any day is insufficient to honor the trade after application of
Specified Hierarchy rules, it will be suspended until Available Liquidity is sufficient,
after application of Specified Hierarchy rules, to honor such trade, and it will receive the
trade date and Closing Price of the date on which it was processed.
| THE SCOTTS COMPANY | FIDELITY MANAGEMENT TRUST COMPANY |
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By:
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/s/ Xxxxx Xxxxxxx 11/28/01 | By: | /s/ Xxxxxxx Xxxxxx | 12/20/01 | ||||||||
| Date | Vice President | Date | ||||||||||
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SCHEDULE “F”
AVAILABLE LIQUIDITY PROCEDURES FOR UNITIZED SPONSOR STOCK FUND
The following procedures shall govern sales of the Sponsor Stock Fund requested for a day on
which Available Liquidity is insufficient:
| 1. | Withdrawals and distributions will be aggregated and placed first in the hierarchy. If Available Liquidity is sufficient for the aggregate of such transactions, all such withdrawals and distributions will be honored. If Available Liquidity is not sufficient for the aggregate of such transactions, then such transactions will be suspended, and no transactions requiring a sale of Sponsor Stock Fund units shall be honored for that day. |
| 2. | If Available Liquidity has not been exhausted by the aggregate of withdrawals and distributions, then all remaining transactions involving a sale of units in the Sponsor Stock Fund (exchanges out) shall be grouped on the basis of when such requests were received, in accordance with standard procedures maintained by the Trustee for such grouping as they may be amended from time to time. To the extent of Available Liquidity, groups of exchanges out of the Sponsor Stock Fund shall be honored, by group, on a “first in, first out” basis. If Available Liquidity is insufficient to honor all exchanges out within a group, then none of the exchanges out in such group shall be honored, and no exchanges out in a later group shall be honored. |
| 3. | Transactions not honored on a particular day due to insufficient Available Liquidity shall be honored, using the hierarchy specified above, on the next business day on which there is Available Liquidity. |
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