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Exhibit 10.33
Trust Agreement
This Trust Agreement, dated as of this FIRST day of February, 1999
(the "Effective Date"), by and between Xxxxx Xxxxxx Group Inc., a Delaware
corporation ("PWG"), and The Chase Manhattan Bank (the "Trustee").
W I T N E S S E T H:
WHEREAS, PWG and the Trustee are currently parties to (i) a Trust
Agreement, dated as of August 29, 1988 (the "First Prior Trust Agreement"), and
(ii) a Trust Agreement, dated as of January 1, 1990 (the "Second Prior Trust
Agreement"), related to the Xxxxx Xxxxxx Group Inc. Supplemental Employee's
Retirement Plan for Certain Senior Officers (the "Plan");
WHEREAS, the Plan has been amended and restated by PWG as of the
Effective Date;
WHEREAS, PWG and the Trustee now desire to amend, restate and
consolidate the First Prior Trust Agreement and the Second Prior Trust
Agreement, effective as of the Effective Date, into a single trust agreement
(the "Trust Agreement") that will take into account various changes made to the
Plan in connection with the restatement thereof and to incorporate into the
consolidated trust agreement the provisions of the model trust agreement
promulgated by the Internal Revenue Service (the "IRS") in Revenue Procedure
92-64; and
WHEREAS, PWG and the Trustee now desire, subject to the provisions
of this Trust Agreement, to continue to hold in trust the assets of the trust,
established pursuant to the First Prior Trust Agreement and the Second Prior
Trust Agreement, and to merge and consolidate such assets into a single trust
(the "Trust"), subject to the claims of the creditors of PWG and its Material
Subsidiaries in the event of the Insolvency (as hereinafter defined) of PWG or
any such Material Subsidiaries until paid to the participants in the Plan (the
"Participants") or their Spouses or Beneficiaries in accordance with the terms
of the Plan and this Trust Agreement;
NOW, THEREFORE, the parties do hereby amend and restate the First
Prior Trust Agreement and the Second Prior Trust Agreement in the form of this
Trust Agreement and agree that the Trust shall be comprised, held and disposed
of as follows:
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Section 1. Establishment of Trust.
(a) PWG hereby deposits with the Trustee IN TRUST the assets held by
the Trustee under the First Prior Trust Agreement and the Second Prior Trust
Agreement (less any portion of assets which, at the direction of PWG, are
transferred to another trust for the benefit of the Participant pursuant to a
separate deferred compensation arrangement of PWG), which, together with any
amounts provided for in Section 1(f), shall become the principal of the Trust to
be held, administered and disposed of by the Trustee as provided in this Trust
Agreement. In addition, on the date of a Change in Control and on each
anniversary thereof, PWG and its Subsidiaries (collectively, "PaineWebber")
shall contribute to the Trust Fund to be held IN TRUST by the Trustee the amount
required by Section 1(g) below. The Trustee hereby 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 Trust
shall be known as the "Xxxxx Xxxxxx Group Inc. Supplemental Employee's
Retirement Plan Trust."
(b) Reasonably promptly following the Effective Date, PWG shall
deliver to the Trustee a copy of the Plan. Following the occurrence of a Change
in Control, the Plan and any amendments thereto that have been delivered to the
Trustee in accordance with this Section 1(b) shall constitute a part of this
Trust Agreement. If the Plan is amended, PWG shall promptly deliver a copy of
the Plan to the Trustee within ten days of the date of the amendment. On and
after the date the Trustee is notified by PWG, the Participant or the
Participant's Beneficiary of a Change in Control or otherwise has actual
knowledge of the occurrence of a Change in Control (the "Change in Control
Notice Date"), the Trustee shall have an obligation to determine whether actions
undertaken by the Trustee hereunder are consistent with, and do not violate any
of, the terms of the Plan (including, without limitation, any amendments to the
Plan that have been delivered to the Trustee in accordance with this Section
1(b)), and, in the event of any conflict between any instruction or direction to
the Trustee from PWG and the Plan, the Trustee shall be authorized to rely on
the terms of the Plan as reasonably construed by the Trustee. No amendment to
the Plan shall affect in any material respect the duties and obligations of the
Trustee hereunder without the Trustee's prior written consent.
(c) The Trust established hereby is irrevocable by PWG.
(d) The Trust is intended to be a grantor trust, of which PWG is the
grantor, within the meaning of subpart E, part I, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended (the "Code"), and
shall be construed accordingly.
(e) The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of PWG and shall be used exclusively
for the purpose of satisfying PaineWebber's obligations to Participants, Spouses
and Beneficiaries (hereinafter, the "Trust Beneficiaries") under the Plan and
PWG's obligations to its general creditors as hereinafter set forth. The Trust
Beneficiaries shall have no preferred claim on, or any beneficial ownership
interest in, any assets of the Trust. Any rights created under the Plan and this
Trust Agreement shall be mere unsecured contractual rights of the Trust
Beneficiaries against PaineWebber. Any assets held by the Trust will be subject
to the claims of PWG's general creditors under U.S. federal and state law in the
event of Insolvency.
(f) PaineWebber, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property (other than PWG
Securities) to the Trust Fund to be held IN TRUST by the Trustee to augment the
principal to be held, administered and disposed of by the Trustee as
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provided in this Trust Agreement. The Trustee shall have no duty or obligation
to compel PaineWebber to make such additional deposits.
(g) On the date of a Change in Control, and on each anniversary
thereof, PaineWebber shall contribute to the Trust Fund to be held IN TRUST by
the Trustee a lump sum cash amount (in same day funds) equal to the amount
required by Section 13(f) of the Plan as in effect on the Effective Date. No
amendment to Section 13(f) of the Plan or any other provision of the Plan or to
this Trust Agreement on or after the date of a Change in Control shall reduce or
limit the obligations of PaineWebber under this Section 1(g).
(h) Except as provided in Section 5(c), the assets of the Trust
shall be held by the Trustee as one account (including, without limitation, the
portions of the Trust Fund previously held pursuant to the First Prior Trust
Agreement and the Second Prior Trust Agreement), without any subaccounting and
without distinction, separation or segregation by virtue of the interest of any
Trust Beneficiary prior to the distribution of Trust assets to a Trust
Beneficiary.
(i) Capitalized words which are not otherwise defined in this
Trust Agreement have the meanings assigned thereto in the Plan. For the purposes
of this Agreement, the following capitalized words shall have the following
meanings:
"Mutual Fund" shall mean an investment company registered under the
Investment Company Act of 1940, as amended.
"PWG Securities" shall mean any Security issued by PWG or any
affiliate, but shall not include an interest in an investment partnership
or an interest in a Mutual Fund managed by PWG or any affiliate thereof.
"Security" or "Securities" shall mean equity and debt securities of
all types, general or limited partnership interests, interests in a Mutual
Fund, interests in a trust, convertible or non-convertible preferred stock
or debt obligations, warrants, rights or options to purchase equity or
debt securities, interests in an investment company, limited liability
company or hedge fund, participations, notes, bonds, debentures,
negotiable and non-negotiable instruments, evidence of indebtedness in any
form, obligations, contract rights, claims and interests (including any
whole or partial interest in, or right to acquire, any of the foregoing).
Section 2. Payments to Participants and Their Beneficiaries.
(a) PWG shall deliver to the Trustee a payment schedule (the
"Payment Schedule") that indicates the amounts payable to each Trust Beneficiary
and the times at which such amounts are payable. The Compensation Committee or
the Plan Administrator shall determine whether an event set forth on the Payment
Schedule has occurred and shall advise the Trustee of such event. The Payment
Schedule shall be consistent with the terms of the Plan and shall be delivered
to the Trustee as soon as practicable after a Participant has elected to begin
receiving benefits under the Plan or after any other event entitling a Trust
Beneficiary to payments under the Plan. Except as otherwise provided herein, the
Trustee shall make payments to each Trust Beneficiary in accordance with such
Payment Schedule and Section 2(b) below. The Trustee shall make provision for
the reporting and withholding of any taxes that may be required to be withheld
with respect to the payment of benefits pursuant to the terms of the Plan and
shall (i) pay amounts withheld to the appropriate taxing authorities or
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(ii) remit such withheld amounts to PWG for payment to the applicable taxing
authorities upon written agreement from PWG that PWG shall be responsible for
the applicable tax reporting and payment. If requested by the Trustee,
PaineWebber shall provide the Trustee with the name and address of each Trust
Beneficiary (the "Trust Beneficiary List"). The Trustee hereby agrees to keep
the Trust Beneficiary List confidential and to utilize it solely in connection
with the administration of the Plan and the Trust Agreement.
(b) Subject to the provisions of Sections 2(c), 2(d) and 2(e), on
and after the Change in Control Notice Date, the Trustee shall pay the amounts
due to a Trust Beneficiary in respect of PWG's obligations under the Plan upon
receipt of either (i) a Payment Schedule from PWG authorizing such payment or
(ii) an affidavit from the Trust Beneficiary in substantially the form of
Exhibit A hereto (an "Affidavit"), attesting to the amount of such payment and
setting forth the circumstances giving rise to the obligation to make such
payment under the Plan. The Trustee shall be authorized to rely on the Payment
Schedule, written instructions from PWG or any such Affidavit, and, in the event
of a conflict between the written instructions from PWG or the Payment Schedule
and the Affidavit, the provisions of the Affidavit shall be controlling. The
Affidavit shall be accompanied by a statement from an enrolled actuary
certifying that the benefit payments requested by the Trust Beneficiary are
correct and in reasonable, good faith compliance with the terms of the Plan. The
reasonable fees and expenses of such enrolled actuary in preparing such
statement shall be paid from the assets of the Trust, to the extent not paid
directly by PaineWebber.
(c) To the extent that (i) the Trustee is notified in writing by PWG
that PWG's payment obligations to all Trust Beneficiaries have been paid in full
and (ii) following the Change in Control Notice Date, the notice from PWG is
confirmed in writing by the then remaining Trust Beneficiaries listed on the
Trust Beneficiary List (which confirmation may be waived by the Trustee if the
Trustee determines in good faith after reasonable inquiry that such confirmation
is being unreasonably withheld by a Trust Beneficiary or cannot be obtained
because the Trust Beneficiary is deceased), then the Trustee shall promptly pay
to PWG the then remaining assets of the Trust.
(d) PaineWebber may make payment of benefits directly to the Trust
Beneficiaries as such benefits become due under the terms of the Plan. In the
event any amount referred to in the Payment Schedule is paid by PaineWebber to a
Trust Beneficiary, PWG shall notify the Trustee in writing of such event. Such
notice shall include a Payment Schedule revised in accordance with such notice,
and, following the Change in Control Notice Date, such revised Payment Schedule
shall be confirmed by the applicable Trust Beneficiary listed on the Trust
Beneficiary List (which confirmation may be waived by the Trustee if the Trustee
determines in good faith after reasonable inquiry that such confirmation is
being unreasonably withheld by the Trust Beneficiary or cannot be obtained
because the Trust Beneficiary is deceased). Upon receipt of such notice, the
Trustee shall amend the Payment Schedule to reduce the amount payable thereunder
as set forth in such notice and, if applicable, confirmed by the Trust
Beneficiary and shall distribute to PaineWebber an amount of assets from the
Trust equal to the fair market value of the amount so paid by PaineWebber.
(e) The Trust is established as a means of facilitating the payment
of PWG's obligations under the Plan. 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 Plan and the Payment Schedule, PaineWebber shall make the
balance of each such payment as it falls due. The Trustee shall notify PWG when
the principal and earnings of the Trust are not sufficient to satisfy the
obligations. Nothing in this Trust Agreement or in the Payment Schedule shall be
construed in any way as relieving PaineWebber of its obligations if such
obligations are not satisfied from the assets of the Trust.
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(f) Whenever it is contemplated that PaineWebber shall make a
payment or contribution under this Trust Agreement, such payment or contribution
shall be made by PWG or any Subsidiary thereof designated by PWG, but no such
designation by PWG shall in any way relieve PWG of its obligation to make such
payment.
(g) PWG shall retain the Actuary to perform an annual actuarial
valuation of the Plan and Trust and to report to PWG and the Trustee in
accordance with generally accepted accounting and actuarial principles on the
assets and liabilities of the Plan and Trust. The Actuary shall also calculate
for PWG and the Trustee the amounts payable under the Plan and Trust to each
Trust Beneficiary. The reasonable fees and expenses of the Actuary may be paid
from the assets of the Trust, to the extent not paid directly by PaineWebber. In
addition, prior to a Change in Control, reasonable administration expenses
incurred by the Plan Administrator in connection with the operation of the Trust
(including reasonable fees and expenses of legal counsel) may be paid from the
assets of the Trust, to the extent not otherwise paid directly by PaineWebber.
Anything in this Section 2(h) to the contrary notwithstanding, the aggregate
amount of fees and expenses that may be charged against the Trust Fund under
this Section 2(h) in any calendar year may not exceed $50,000.
Section 3. Trustee Responsibility Regarding Payments to Trust
Beneficiaries when Company is Insolvent.
(a) The Trustee shall cease payment of benefits to the Trust
Beneficiaries if PWG or any Material Subsidiary is Insolvent. PWG or any
Material Subsidary shall be considered "Insolvent" for purposes of this Trust
Agreement if (i) PWG or any Material Subsidiary is unable to pay its debts as
they become due or (ii) PWG or any Material Subsidiary is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code or the comparable
provisions of any other applicable jurisdiction to which PWG is then subject.
(b) At all times during the continuance of the Trust, as provided in
Section 1(e) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of PWG and its Material Subsidiaries under U.S.
federal and state law as set forth below and the laws of any other applicable
jurisdiction to which PWG is then subject.
(1) The Chief Financial Officer of PWG shall have the duty to inform
the Trustee in writing of PWG's or any Material Subsidiary's Insolvency.
If a person claiming to be a creditor of PWG or any Material Subsidiary
alleges in writing to the Trustee that PWG or any Material Subsidiary has
become Insolvent, the Trustee shall promptly determine whether PWG or any
Material Subsidiary is Insolvent and, pending such determination, the
Trustee shall discontinue payment of benefits to the Trust Beneficiaries.
(2) Unless the Trustee has actual knowledge of PWG's or any Material
Subsidiary's Insolvency, or has received notice from PWG or any Material
Subsidiary or a person claiming to be a creditor alleging that PWG or any
Material Subsidiary is Insolvent, the Trustee shall have no duty to
inquire whether PWG or any Material Subsidiary is Insolvent. The Trustee
may in all events rely on such evidence concerning PWG's or any Material
Subsidiary's solvency as may be furnished to the Trustee and that provides
the Trustee with a reasonable basis for making a determination concerning
PWG's or any Material Subsidiary's solvency.
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(3) If at any time the Trustee has determined that PWG or any
Material Subsidiary is Insolvent, the Trustee shall discontinue payments
to the Trust Beneficiaries and shall hold the assets of the Trust for the
benefit of PWG's or any Material Subsidiary's general creditors. Nothing
in this Trust Agreement shall in any way diminish any rights of the Trust
Beneficiaries to pursue their rights as general creditors of PWG or any
Material Subsidiary with respect to benefits due under the Plan or
otherwise.
(4) The Trustee shall resume the payment of benefits to the Trust
Beneficiaries in accordance with Section 2 of this Trust Agreement only
after the Trustee has determined that PWG or any Material Subsidiary is
not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient Trust assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to Section 3(b) and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to the
Trust Beneficiaries under the terms of the Plan for the period of such
discontinuance, less the aggregate amount of any payments made to the Trust
Beneficiaries by PaineWebber under the terms of the Plan in lieu of the payments
provided for hereunder during any such period of discontinuance.
(d) As used herein, "Material Subsidiary" shall mean any
significant subsidiary of PWG as determined in accordance with Regulation S-X
under the Securities Exchange Act of 1934. PWG shall from time to time provide
the Trustee with a list of Material Subsidiaries.
Section 4. Payments to PWG. Except as provided in Sections 2 and 3
above, PWG shall have no right or power to direct the Trustee to return to PWG
or to divert any of the assets of the Trust to any purpose other than the
payment of the obligations before all payment of benefits has been made to the
Trust Beneficiaries pursuant to the terms of the Plan. Following a determination
by the Trustee in accordance with Sections 2(c) and 2(d) that the obligations
have been paid in full, the Trustee shall pay to PWG any remaining assets of the
Trust, net of any unpaid Trustee's fees and expenses and a reserve for accrued
but unpaid expenses of the Trust.
Section 5. Investment Authority.
(a) In no event may the Trust invest in PWG Securities, other than
(i) a de minimis amount held in common investment vehicles in which the Trustee
invests or (ii) shares of a Mutual Fund managed by an affiliate of PaineWebber.
Prior to the Change in Control Notice Date, in accordance with Section 5(b), all
rights associated with assets of the Trust shall be exercised by the Trustee at
the direction of an Investment Manager or other person designated by PaineWebber
for this purpose, and (except as otherwise contemplated by Section 5(c)) shall
in no event be exercisable by or rest with the Trust Beneficiaries. 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 this Section 5.
(b) Subject to Section 5(f), the Trustee shall invest the assets of
the Trust either in the manner directed by PaineWebber or in accordance with the
investment direction of an Investment Manager or Investment Managers selected by
PaineWebber. If more than one Investment Manager is designated by PaineWebber,
the Trustee shall apportion the assets of the Trust into a separate sub-account
for each such Investment Manager and shall invest the assets of the sub-account
in accordance with the
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investment directions of the Investment Manager for that sub-account. The
Trustee shall be under no obligation to collect any money or other assets from
PaineWebber but shall merely hold the assets of the Trust as conveyed to the
Trustee by PaineWebber. If no timely investment directions are delivered to the
Trustee by PaineWebber or an Investment Manager designated by PaineWebber or by
a Participant or Investment Manager designated by a Participant in accordance
with Section 5(c), the assets of the Trust shall be invested by the Trustee in
one or more money market funds provided by the Trustee for this purpose so as to
provide for the daily accrual of interest.
(c) If a Participant elects a variable annuity option under the
Plan, the Trustee shall, if directed by the Plan Administrator, allocate a
portion of the assets of the Trust to a separate sub-account to be invested in
the manner directed by an Investment Manager retained by the Participant for
this purpose. The assets of the Trust Account initially allocated to the
sub-account shall be in cash or cash equivalents and shall have a value on the
date of allocation determined in accordance with Section 12 of the Plan. On each
Adjustment Date following the establishment of the sub-account, the Trustee
shall allocate such additional amounts in cash or cash equivalents to the
sub-account as may be directed by the Plan Administrator in accordance with
Section 12 of the Plan. The Trustee shall pay benefits to the Participant (or
Beneficiary thereof) for whom the sub-account is established under this Section
5(c) only from the assets of the sub-account during the period for which the
sub-account is maintained for such Participant hereunder. The Trustee shall be
under no duty or obligation to verify that a Participant has elected a variable
annuity or to determine the amount of assets to be allocated to the sub-account
described in this Section 5(c).
(d) The Trustee shall not follow the investment instructions
received by an Investment Manager retained by a Participant in accordance with
Section 5(c) if the Trustee reasonably determines that such investment
instructions would require the investment of assets in securities of PWG or any
of its Subsidiaries or affiliates (other than a Mutual Fund managed by an
affiliate of PaineWebber).
(e) If directed by the Plan Administrator, the Trustee shall, at the
time that a Trust Beneficiary is first entitled to payments in the form of an
annuity (other than a variable annuity), purchase a commercial annuity contract
or policy from an insurance company designated by the Plan Administrator with a
minimum rating of AA by Standard & Poor's Corporation or the equivalent by
another nationally recognized rating agency. The annuity contract or policy
shall be owned by the Trustee and the Trustee shall be entitled to all annuity
and other payments therefrom, but the life or lives for measuring the period of
payments shall be specified to the Trustee by the Plan Administrator or by the
Actuary at the direction of the Plan Administrator. If the annuity contract is
not sufficient for any reason to satisfy all obligations under the Plan to the
Trust Beneficiaries in respect of whom such contract was purchased, the
remaining obligations to such Trust Beneficiaries shall be paid from the assets
of the Trust, to the extent not otherwise paid by PaineWebber.
(f) On or after the Change in Control Notice Date, (i) the assets of
the Trust (other than a portion of the assets allocated to a separate
sub-account in the manner contemplated by Section 5(c)) shall be invested solely
at the direction of the Trustee or one of its affiliates in a diversified
portfolio of fixed income assets designed to achieve a reasonable rate of return
with minimal risk to principal; and (ii) the Trustee or one of its affiliates
shall purchase, at the time that a Trust Beneficiary is first entitled to
payments in the form of an annuity (other than a variable annuity), an annuity
in the manner contemplated by Section 5(e) without regard to any investment
direction from the Plan Administrator.
(g) When the Trustee delivers Securities against payment, delivery
of the property and receipt of payment may not be simultaneous. The risk of
non-receipt of payment shall be the Trust's, and
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the Trustee shall have no liability therefor, unless such non-receipt of payment
is a result of the Trustee's (or its officers', directors', employees',
nominees' or agents') gross negligence or willful misconduct. All credits to the
Trust of the anticipated proceeds of sales and redemptions of Securities shall
be conditional upon receipt by the Trustee of final payment and may be reversed
to the extent final payment is not received. At the discretion of the Trustee,
the Trust may make use of such conditional credits. To the extent such credits
do not become unconditional by receipt of final payment, the Trust shall
reimburse the Trustee upon demand for the amount of such conditional credits so
used. When the Trustee is to receive Securities, it is authorized to accept
documents in lieu of such Securities as long as such documents contain the
agreement of the issuer thereof to hold such Securities subject to the Trustee's
sole order. The Trustee may, in its discretion, advance funds to the Trust to
facilitate the settlement of any trade. In the event of such an advance, the
Trust shall immediately reimburse the Trustee for the amount thereof, together
with interest at the rate then charged by the Trustee to similar accounts for
similar advances.
Section 6. Disposition of Income. During the term of the Trust, all
income received by the Trust, net of expenses, shall be accumulated and
reinvested in accordance with the provisions of Section 5.
Section 7. Accounting by Trustee.
(a) (i) The Trustee shall keep accurate and detailed records
of all investments, receipts, disbursements and all other transactions required
to be made, including such specific records as shall be agreed upon in writing
between PWG and the Trustee. Within ninety days following the close of each
calendar year and within ninety days after the removal or resignation of the
Trustee, the Trustee shall deliver to PWG (and, following the Change in Control
Notice Date, to the Trust Beneficiary) 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 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 separate), 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. To the extent that one or more
sub-accounts have been maintained during the calendar year in accordance with
Section 5(c), the Trustee shall provide a separate accounting with respect to
each such sub-account. With respect to any Securities which do not have a
readily ascertainable market value, PWG shall provide the Trustee with periodic
valuations of such Securities. The valuation method of each valuation report
shall be done in a manner consistent with valuations used by PWG on its
inventory of Securities. The Trustee may conclusively rely upon such valuations
of PWG for all purposes hereunder without inquiry.
(ii) Unless PWG, or a Trust Beneficiary shall have notified the
Trustee of exceptions, objections, outstanding claims against the Trustee or
disputed items within 180 days following receipt of an annual statement of
account or final statement of account delivered in accordance with Section
7(a)(i) above, PWG and the Trust Beneficiary, if applicable, shall be deemed to
have approved such statement of account and the Trustee shall be relieved and
discharged from all matters covered therein. This Section 7(a)(ii) shall not
apply to any matter which the Trustee willfully or through gross negligence
misstates, conceals or omits in the preparation of such statement of account or
to any acts of fraud by the Trustee.
(b) Nothing contained in this Trust Agreement or in the Plan shall
deprive the Trustee of the right to have a judicial settlement of its accounts.
In any proceeding for a judicial settlement of the Trustee's account or for
instructions in connection with the Trust, the only other necessary parties
thereto in addition to the Trustee shall be PWG and the Trust Beneficiary. No
person interested in the Trust,
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other than PWG and the Trust Beneficiary, shall have a right to compel an
accounting, judicial or otherwise.
Section 8. Responsibility of Trustee.
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with a like aim; provided, however, that the
Trustee shall incur no liability to any person for any action taken (i) pursuant
to an Affidavit delivered to the Trustee by a Trust Beneficiary or (ii) pursuant
to any written direction, request or approval given by PaineWebber, the Plan
Administrator or an Investment Manager that is in conformity with the terms of
the Plan and this Trust Agreement.
(b) Subject to Section 9, if the Trustee undertakes or defends any
litigation arising in connection with the Trust, PWG shall indemnify fully the
Trustee against the Trustee's costs, expenses and liabilities (including,
without limitation, attorneys' fees and expenses) relating thereto and shall be
primarily liable for such costs, expenses and liabilities.
(c) The Trustee may consult with legal counsel (who may also be
counsel for PaineWebber generally) with respect to any of its duties or
obligations hereunder. The Trustee may retain and consult with counsel, who may
be counsel for PWG or for the Trustee in its individual capacity, and shall not
be deemed imprudent by reason of its taking or refraining from taking action in
reasonable reliance upon the opinion of such counsel. The Trustee shall not be
required to give any bond or any other security for the faithful performance of
its duties under this Trust Agreement, except as required by law. The Trustee
may also retain one or more consultants to assist it in the performance of its
duties under the last sentence of Section 1(b) of this Trust Agreement. The
Trustee shall not be liable for any acts or omissions of any such consultant,
provided that the Trustee selects and supervises that consultant in accordance
with the standard of care set forth in Section 8(a) of this Trust Agreement.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisers, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred
on Trustees by applicable law, unless expressly provided otherwise herein;
provided, however, that, if an insurance policy is held as an asset of the
Trust, the Trustee shall have no power to name a beneficiary of the policy other
than the Trust, to assign the policy (as distinct from conversion of the policy
to a different form) other than to a Successor Trustee (as defined below) or to
loan to any person the proceeds of any borrowing against such policy.
(f) The Trustee shall periodically inform the Actuary as to the
market value of the assets of the Trust and provide the Actuary with a list of
Trust investments. As of the last business day of each calendar month, the
Trustee shall render a monthly statement which shall show the cash position of
the Trust at the beginning of the month, assets conveyed by PaineWebber to the
Trustee to be held in trust during the month, assets disbursed from the Trust to
pay obligations or expenses, income, gains and losses of the Trust for the month
and a revaluation of assets as of the date of the rendering of the monthly
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statement. To the extent that separate sub-accounts are maintained pursuant to
Section 5(c), the monthly statement contemplated by this Section 8(f) shall be
prepared for each such sub-account, for the assets of the Trust not allocated to
such sub-accounts and for all of the assets of the Trust taken as a whole. In
addition, a separate monthly report contemplated hereby shall be prepared with
respect to the portion of the assets of the Trust held in an insurance policy or
annuity in accordance with Section 5(e).
(g) Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or applicable law, the Trustee shall not have any power
that could give the Trust the objective of carrying on a business and dividing
the gains therefrom, within the meaning of Section 301.7701-2 of the Procedures
and Administrative Regulations promulgated pursuant to the Code.
(h) The Trustee shall be responsible for such duties as are
specifically set forth as such in this Trust Agreement or as otherwise agreed to
in writing by the Trustee. The Trustee shall not be compelled to take any action
toward the execution or performance of the Trust created hereunder or to
prosecute or defend any suit or claim in respect thereof, unless indemnified to
its satisfaction against loss, liability, and reasonable costs and expenses. The
Trustee shall be under no liability or obligation to anyone with respect to any
failure on the part of PWG to perform any of its obligations under this Trust
Agreement.
(i) PWG shall act in accordance with the Plan, and, prior to the
Change in Control Notice Date, the Trustee shall not be responsible in any
respect for acting in accordance with the Plan. The Trustee shall not be
responsible for the adequacy of the Trust to meet and discharge all payments and
liabilities under the Plan. Prior to the Change in Control Notice Date, the
Trustee shall be fully protected in relying upon any written notice,
certificate, instruction, direction or other communication of any investment
manager appointed by PWG, the Plan Administrator or other duly authorized
officers of PWG that is not contrary to the express provisions of this Trust
Agreement.
(j) The Trustee shall be entitled conclusively to rely upon any
written notice, instruction, direction, certificate or other communication
reasonably believed by it to be genuine and to be signed by the proper person or
persons, and the Trustee shall be under no duty to make investigation or inquiry
as to the truth or accuracy of any statement contained therein.
(k) In no event shall the Trustee incur liability to any person for
any indirect, consequential or special damages (including, without limitation,
lost profits) of any form, whether or not foreseeable and regardless of the form
of action in which such a claim may be brought, with respect to the Trust or its
role as Trustee, except to the extent that such damages are the result of the
gross negligence or willful misconduct of the Trustee. The foregoing sentence
shall not apply with respect to any such indirect, consequential or special
damages to the extent that such damages are the result of the willful misconduct
or gross negligence of the Trustee to the extent such indirect, consequential or
special damages are otherwise recoverable at law or in equity.
(l) PWG shall pay and shall protect, indemnify and save harmless the
Trustee and its officers, directors or trustees, employees, agents and nominees
from and against any and all losses, liabilities (including liabilities for
penalties), actions, suits, judgments, demands, damages, reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) of any nature arising from or relating to any action or failure to act
by the Trustee in connection with the transactions contemplated by this Trust
Agreement, except to the extent that any such loss, liability, action, suit,
11
demand, damage, cost or expense is the result of the gross negligence or willful
misconduct of the Trustee.
(m) For purposes of this Agreement, acts or omissions of the Trustee
shall include those of its directors, trustees, officers, employees, agents,
appointees, nominees, consultants, advisers and assigns.
Section 9. Compensation and Expenses of the Trustee.
(a) PWG shall pay (or make available to the Trustee to pay) any
federal, state, local or other taxes (including withholding taxes) imposed or
levied with respect to the corpus or income of the Trust or any part thereof
under existing or future laws, and PWG, in its discretion, may contest the
validity or amount of any transaction cost or any tax assessment, claim or
demand respecting the Trust or any part thereof. The Trustee shall maintain such
records and shall deliver such reports to PWG as may be necessary to permit the
proper allocation of taxes among investments and the proper payment of taxes by
PWG.
(b) PWG shall pay directly (and not from the assets of the Trust) to
the Trustee from time to time such reasonable compensation for its services as
trustee as shall be agreed upon by PWG and the Trustee. Prior to the occurrence
of a Change in Control, PWG shall also pay the reasonable and necessary expenses
(including reasonable fees of counsel engaged by the Trustee pursuant to
Sections 8(b) and 8(c) of this Trust Agreement) incurred by the Trustee in the
performance of its duties under this Trust Agreement; provided, however, that
the aggregate amount of any legal expenses incurred in any calendar year by the
Trustee under this Trust shall not exceed $5,000, unless (i) the Trustee has
delivered written notice ("Notice") to PWG at least ten business days prior to
the date on which such legal fees or expenses are to be incurred or such other
time as may be agreeable by the parties and (ii) PWG has not notified the
Trustee in writing of its objection to the Trustee incurring such expenses prior
to the expiration of such ten-business-day period. To constitute Notice for
purposes of the previous sentence, the writing from the Trustee to PWG shall
specify in reasonable detail (i) the expenses to be incurred, (ii) the reason or
reasons why the Trustee believes it is necessary to incur such expenses, (iii)
the anticipated amount of such expenses and (iv) the legal counsel who will be
paid any amounts for which reimbursement will be sought by the Trustee under
this Section 9(b). If PWG notifies the Trustee in writing of its objection to
any expenses described in the Notice prior to the expiration of the
ten-business-day period, such expense shall not be reimbursable to the Trustee
either from the assets of the Trust or from PWG, regardless of whether the
Trustee determines to incur such expense. The ten-business-day notice period
described above shall begin on the date the Notice is received by PWG. Any
compensation and expenses which are otherwise reimbursable under this Section
9(b) and which are not paid by PWG may be deducted by the Trustee from the
assets of the Trust. If the Trustee satisfies such obligations out of the assets
of the Trust, PWG shall immediately, upon demand by the Trustee, deposit into
the Trust a sum equal to the amount paid by the Trust.
(c) After a Change in Control, the reasonable fees and expenses
(including, without limitation, reasonable fees of counsel and consultants
engaged by the Trustee pursuant to Sections 8(b) and 8(c) of this Trust
Agreement) incurred by the Trustee in the performance of its duties under this
Trust Agreement shall be collected directly from the assets of the Trust to the
extent such fees and expenses are not paid by PWG.
Section 10. Resignation and Removal of Trustee.
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(a) Subject to Section 11, the Trustee may resign at any time by
written notice to PWG, which shall be effective ninety days after receipt of
such notice by PWG, unless PWG and the Trustee agree in writing to a shorter or
longer period. Until such time as a Successor Trustee is duly appointed and
qualified to serve hereunder, such resignation shall not affect (i) the
Trustee's obligations to hold custody of the assets of the Trust, to make
payments contemplated by Section 2 of this Agreement, or to dispose of
Securities in order to make such payments, (ii) the Trustee's obligations or
responsibilities set forth in this Agreement or (iii) the Trustee's rights under
Section 9 of this Agreement.
(b) Subject to Section 11, the Trustee may be removed at any time by
written notice from PWG, which removal shall be effective ninety days after such
notice of removal is delivered to the Trustee by PWG. Such removal shall not be
effective until such time as a Successor Trustee is duly appointed and qualified
to serve hereunder.
(c) Upon the resignation or removal of the Trustee and appointment
of a Successor Trustee, all assets shall subsequently be transferred to the
Successor Trustee. The transfer shall be completed within thirty days after
receipt of notice of resignation, removal or transfer.
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 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 the proceeding
shall be allowed as administrative expenses of the Trust.
Section 11. Appointment of the Successor Trustee.
(a) If the Trustee resigns or is removed in accordance with the
provisions of this Trust Agreement, PWG shall appoint a bank or trust company
unaffiliated with PWG or any successor to all or substantially all of the assets
of PWG that has corporate trustee powers under applicable law and which has
trust assets under management at the time of such appointment of at least $10
billion, as a successor to replace the Trustee upon such resignation or removal
(the "Successor Trustee"). The appointment shall be effective when accepted in
writing by the Successor Trustee, which 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
PWG or the Successor Trustee to evidence the transfer. Following a Change in
Control, the Trustee may not be removed by PaineWebber unless the then current
Trustee approves the Successor Trustee, which approval shall be granted only if
the Trustee reasonably determines that the appointment of the Successor Trustee
will not impair the rights of any Trust Beneficiary under the Plan and this
Trust Agreement.
(b) The Successor Trustee need not examine the records and acts of
any prior Trustee. The Successor Trustee shall not be responsible for and PWG
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.
(c) When this Trust shall have been transferred and delivered to the
successor trustee and the accounts of the Trustee have been settled as provided
in Section 7 hereof, the Trustee shall be released and discharged from all
further accountability or liability for this Trust to the extent contemplated by
Section 7 hereof.
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Section 12. Amendment or Termination.
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and PWG. Notwithstanding the foregoing, no such
amendment shall conflict with the terms of the Plan or shall make the Trust
revocable. Following the date of a Change in Control, this Trust Agreement may
not be amended in a manner which is adverse in any respect to the Trust
Beneficiary without the prior written consent of the Trust Beneficiary.
(b) The Trust shall not terminate until the earlier to occur of (i)
the date on which the Trust Beneficiaries are no longer entitled to any benefits
under the Plan and all obligations have been satisfied in full and (ii) the
twenty-first anniversary of the death of the last Trust Beneficiary and Spouse
of a Trust Beneficiary alive on the date of execution of this Trust Agreement.
Upon termination of the Trust, any assets remaining in the Trust shall be
returned to PWG.
(c) The termination of the Trust shall not affect the
respective rights and obligations of PWG and the Trustee under Section 8 of this
Agreement.
Section 13. Trust Effective Date. This Trust Agreement shall be
effective on the Effective Date.
Section 14. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without invalidating the
remaining provisions hereof.
(b) Benefits payable to the Trust Beneficiaries under this Trust
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 notice required or permitted to be given shall be deemed
given if directed to the person to whom addressed at such address and mailed by
regular United States mail, first-class prepaid.
(d) The headings and captions herein are provided for reference and
convenience only, shall not be considered part of the Trust Agreement and shall
not be employed in the construction of the Trust Agreement.
(e) PWG shall provide the Trustee with a written certification with
respect to any persons who may act on behalf of PWG and who are appointed as
Investment Managers, together with specimen signatures of such individuals. The
Trustee shall have no duty to inquire as to the authenticity of such
certification; provided, however, that the Trustee may reasonably require PWG to
provide additional information with regard to the authorized persons and their
specimen signatures.
(f) If a Participant elects a variable annuity option under the Plan
and the Trustee is directed to allocate a portion of the assets of the Trust to
a separate sub-account to be invested in the manner directed by a Participant or
an Investment Manager retained by the Participant for this purpose, PWG shall
provide the Trustee with a specimen signature of such Participant and any
Investment Manger retained by such Participant. The Trustee shall have no duty
to inquire as to the authenticity of such
14
certification; provided, however, that the Trustee may reasonably require PWG to
provide additional information with regard to such Participant and Investment
Manager (if any) and their specimen signatures.
(g) This Agreement shall be construed and interpreted under, and the
Trust hereby created shall be governed by, the laws of the State of New York
insofar as such laws do not contravene any applicable federal laws, rules or
regulations. The United States District Court of the Southern District of New
York shall have the sole and exclusive jurisdiction over any lawsuit or other
judicial proceeding relating to or arising from this Agreement. If that court
lacks federal subject matter jurisdiction, the Supreme Court of the State of New
York, New York County, shall have sole and exclusive jurisdiction. Either of
these courts shall have proper venue for any such lawsuit or judicial
proceeding, and the parties waive any objection to venue or their convenience as
a forum. The parties agree to submit to the jurisdiction of any of the courts
specified and to accept service of process to vest personal jurisdiction over
them in any of these courts. The parties further hereby knowingly, voluntarily
and intentionally waive, to the fullest extent permitted by applicable law, any
right to a trial by jury with respect to any such lawsuit or judicial proceeding
arising from or relating to this Agreement or the transactions contemplated
hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the Effective Date.
XXXXX XXXXXX GROUP INC.
By:
------------------------------
Title:
THE CHASE MANHATTAN BANK,
as Trustee
By:
------------------------------
Title:
15
Exhibit A
Affidavit
I, _________________, under penalties of perjury, do hereby solemnly
swear (i) that I make this affidavit in order to induce The Chase Manhattan
Bank, as Trustee under the Trust Agreement (the "Trust Agreement") with Xxxxx
Xxxxxx Group Inc. ("PWG"), to pay me the benefits to which I am entitled under
such Trust Agreement and the Xxxxx Xxxxxx Group Inc. Supplemental Employee's
Retirement Plan for Selected Senior Officers (the "Plan"), (ii) that the amount
of the payments to which I am entitled is described in the attached schedule
hereto, (iii) that the first such payment is due on _____ [DATE] and (iv) that
the events giving rise to PWG's obligation to make such payment and the
provisions of the Plan applicable thereto are accurately and fairly described on
the schedule attached hereto. Attached to this Affidavit is a statement from an
enrolled actuary certifying that the benefit payments requested hereunder are
correct and in reasonable, good-faith compliance with the terms of the Plan.
-------------------------
Signature
STATE OF )
: ss.:
COUNTY OF )
On the __ day of _____________, 19__, before me personally came
________________________________, to me known, who, being by me duly sworn, did
depose and say that he resides at ________________________, and that the
statements herein are all true and correct.
-------------------------
Notary Public
