Exhibit 10
HARNISCHFEGER INDUSTRIES DEFERRED COMPENSATION TRUST
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(as amended and restated as of October 9, 1995)
This Trust Agreement made as of the 9th day of
October, 1995, by and between Harnischfeger Industries,
Inc., a Delaware corporation (the "Company") and Xxxxxxxx &
Xxxxxx Trust Company, located at Milwaukee, Wisconsin, and
its successor or successors and assigns in the trust hereby
evidenced, as trustee (the "Trustee") providing for the
amendment and restatement of the trust established on the
1st day of November, 1988 by and between the Company and
the Trustee and know as the Harnischfeger Industries
Deferred Compensation Trust (hereinafter called the
"Trust") which provides a source for payments required to
be made to participants (the "Participants") under certain
of the Company's nonqualified employee benefit plans listed
on Schedule I (the "Plans").
WITNESSETH THAT:
WHEREAS, the Company is hereby making a
contribution to the Trustee of $1,000.00 in cash, and may
in the future make additional contributions of common stock
of the Company (the "Stock"), cash, and/or other property
(all such present and future contributions being hereafter
referred to as "Contributions"), to the Trust to aid the
Company in accumulating funds to satisfy its obligations
under the Plans; and
WHEREAS, the Company intends that the Trust Assets
(as defined in paragraph 2.1(d) below) shall be subject to
the claims of the Company's creditors in the event the
Company becomes Insolvent (as defined in paragraph 5.5
below); and
WHEREAS, the Company intends that the Trust shall
constitute an unfunded arrangement and shall not affect the
status of the Plans as unfunded plans maintained for the
purpose of providing deferred compensation for select
management and highly compensated employees for purposes of
Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"); and
WHEREAS, the Company intends that the Trust shall
remain in existence until all the Trust Assets shall have
been distributed to the Participants or reverted to the
Company, all in accordance with the provisions of this
Trust Agreement;
NOW, THEREFORE, IT IS AGREED, in consideration of
the mutual undertakings of the parties and other good and
valuable consideration, the parties hereto do hereby amend
and restate the Trust and agree that the Trust shall be
comprised, held and disposed as follows:
ARTICLE 1
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Certain Definitions
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1.1 Definitions. As used herein, the
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following terms have the following respective meanings:
(a) "Account" means each bookkeeping
account maintained on behalf of each
Participant under a Plan reflecting the Plan
benefits which are or may become payable to the
Participant or his Beneficiary under the terms
of such Plan.
(b) "Beneficiary" means any
beneficiary of a Participant under a Plan.
(c) "Board" means the board of
directors of the Company.
(d) "Change in Control" shall mean:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13 (d) (3) or 14 (d) (2)
of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (x) the then
outstanding Company Shares (the "Outstanding Company
Common Stock") or (y) the combined voting power of the
then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that for
purposes of this subparagraph (i), the following acquisitions
shall not constitute a Change in Control: (t) any acquisition by
the Company, (u) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or
(v) any acquisition by any corporation pursuant to a
transaction which complies with clauses (x), (y) and (z) of
subparagraph (iii) of this paragraph 1.1(d); or
(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at
least two-thirds (2/3) of the directors then comprising the
Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or any other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Incumbent Board; or
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(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially
all of
the assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination, (x) all of the
individuals and entities who were the beneficial owners,
respectively, of the
Outstanding Company Common Stock and Outstanding Company
Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 80% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the
case may
be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result
of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the
case may be, (y) no Person (excluding any corporation resulting from
such Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock
of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior
to the Business Combination and (z) at least two-thirds (2/3) of the
members of the board of directors of the corporation resulting from
such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action
of
the Board, providing for such Business Combination; or
(iv) Approval by the shareholders of the
Company of a complete liquidation or dissolution of the
Company.
e) "Committee" means the Management
Policy Committee of the Company; provided that
(i) if at any time prior to a Change in Control
no such committee is in existence, the Board
shall be the Committee, and (ii) following a
Change in Control, the Committee shall be
comprised of those persons who were members of
the Committee immediately before the occurrence
of the Change in Control.
(f) "Company Shares" means shares of
Stock.
(g) "Government Securities" means
obligations of, or guaranteed as to
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principal and interest by, the United States
Government.
(h) "Permitted Investments" means:
Company Shares; Government Securities; taxable
corporate commercial paper having at the date
of investment a rating of at least Al/Pl from
either Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc. (or, in either case,
its successor); certificates of deposit of
banks or trust companies having a long-term
debt rating of at least AA/Aa from either
Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc. (or, in either case,
its successor); money market mutual funds or
common trust funds or other collective
investment funds maintained by the Trustee for
trust investment purposes which are invested
entirely or substantially entirely in
investments of the foregoing kinds with average
daily maturities of less than forty-five days;
and such other investments, if any, as may
hereafter be approved from time to time by the
Committee as "Permitted Investments."
1.2 Gender and Number. Words denoting one
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gender shall include the other genders, and the singular
shall include the plural and the plural shall include the
singular, whenever required by the context.
ARTICLE 2 -----------
Introduction -------------
2.1 Continuation of Trust.
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(a) The Company hereby contributes to
the Trust, and the Trustee hereby acknowledges
receipt of, the Contribution set forth in
paragraph 2.2(a) hereof, which, together with
any future Contributions, shall be added to the
principal of the Trust, to be held,
administered and disposed of by the Trustee in
accordance with this Trust Agreement.
(b) The Trust shall be irrevocable.
(c) The Trust is intended to be a
grantor trust of which the Company is the
grantor, within the meaning of Section 671 of
the Internal Revenue Code of 1986, as amended
(the "Code"), and an unfunded arrangement that
does not affect the status of the Plans as
unfunded plans maintained for the purpose of
providing deferred compensation for select
management and highly compensated employees for
purposes of Title I of ERISA, and shall be
construed accordingly. The Trust is not
designed or intended to qualify under Section
401(a) of the Code.
(d) The principal of the Trust and any
earnings thereon and other
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increases thereof shall be held separate and
apart from other funds of the Company and shall
be used exclusively for the uses and purposes
herein set forth. Such principal, increased by
any earnings thereon and other increases
thereof and reduced by any losses and
distributions from the Trust and any other
reductions thereof, is sometimes referred to
herein as the "Trust Assets". The Participants
shall not have any preferred claim on, nor any
beneficial ownership interest in, any of the
Trust Assets before the Trust Assets are paid
to the Participants pursuant to the terms of
this Trust Agreement, and all rights created
under the Plans and this Trust Agreement shall
be mere unsecured contractual rights of the
Participants against the Company. The Trust
Assets shall at all times be subject to the
claims of the Company's general creditors under
federal and state law in accordance with
paragraph 5.4.
2.2 Funding. The Company shall initially and
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subsequently transfer assets to the Trustee as follows.
(a) Simultaneously with the execution
and delivery of this Trust Agreement, the
Company shall transfer to the Trustee cash in
the amount of $1,000.00.
(b) The Company shall make additional
Contributions to the Trust in accordance
paragraphs 2.2(e) and 5.4 of this Trust
Agreement, and such other Contributions as the
Committee deems appropriate from time to time.
The Trustee shall be responsible only for
Contributions actually received by it
hereunder, and the Trustee shall have no duty
or responsibility with respect to the timing,
amounts and sufficiency of the Contributions
made or to be made by the Company hereunder.
(c) The Company shall have the duty to
inform the Trustee and the Committee whenever a
Change in Control occurs. If any two
Participants notify the Trustee that a Change
in Control has occurred, the Trustee shall so
notify the Company and the Committee and,
unless within five business days thereafter the
Company delivers to the Trustee and the
Committee an opinion of independent counsel to
the Company (which opinion may be based upon
representations of fact, as long as counsel
does not know that such representations are
untrue) that a Change in Control has not
occurred, then a Change in Control will be
deemed to have occurred, and the Trustee and
the Committee will be deemed to have received
notice on such fifth business day that a Change
in Control has occurred.
(d) The Trustee shall determine, and
shall give the Committee notice of , the
"Trust Asset Value" (as defined below) and the
Committee shall determine, and give the Company
and the Trustee notice of, the "Required
Assets" (as defined below) as soon as
practicable, but in any event within ten
business days, after (i) the date they receive
notice that a Change in Control has occurred,
and (ii) the end of each calendar quarter
thereafter. The "Trust Asset
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Value" means the aggregate net fair market
value of the Trust Assets as of the date of the
Change in Control or the end of the calendar
quarter, as the case may be (such date, the
"Measurement Date"). The "Required Assets"
means the present value, as of the Measurement
Date, of the sum of (x) the maximum aggregate
amount that could become payable to the
Participants under the Plans, and (y) an
estimate of the expenses reasonably likely to
be incurred by the Trust from the Measurement
Date through the termination of the Trust,
including without limitation the Trustee's
fees. In determining present value, the
Committee shall use as a discount rate the
applicable federal rate (as defined in Section
1274(d) of the Code) in effect on the
Measurement Date (the "Applicable Federal
Rate"), or such lower amount as it shall in its
discretion determine.
(e) The Company shall contribute to the
Trust, in cash, the excess (if any) of the
Required Assets over the Trust Asset Value as
of any Measurement Date plus interest at the
Applicable Federal Rate from the Measurement
Date through the date of contribution, within
three business days after receiving notice
thereof.
2.3. Acceptance. The Trustee accepts the duties and
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obligations of the Trustee hereunder.
2.4 No Effect on Company's Plan Obligations.
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Neither the establishing nor maintenance of the Trust, nor
the Company's transfer of any assets to the Trustee, shall
affect in any way the Participants' benefits under the
Plans or the Company's obligations to pay such benefits,
provided that any payments made hereunder shall be
considered payments under the applicable Plan.
ARTICLE 3 -----------
Accounting, Provision of Information by the Company
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3.1 Plan and Trust Accounts.
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(a) The Committee shall maintain such
separate Accounts for each Participant with
respect to his benefits payable and paid under
each Plan as it considers necessary or
desirable for the proper administration of the
Plans. Subject to the provisions of paragraph
3.1(c), the Trustee shall not make any separate
investments for each Participant or Plan but
rather shall invest all assets hereunder as a
single Trust Fund to provide any Plan benefits
to be paid by the Trustee hereunder.
(b) The Trustee shall keep accurate and
detailed records of all investments, receipts,
disbursements, and all other transactions
required to be done, including such specific
records as shall be agreed upon in writing
between
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the Committee and the Trustee. Within sixty
days following the close of each calendar year
and within sixty days after the removal or
resignation of the Trustee, the Trustee shall
deliver to the Committee a written statement 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 shown separately), 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, and the book and fair market value of any
such asset.
(c) Upon receiving notice of a Change
in Control, the Committee shall instruct the
Trustee to, and the Trustee shall, establish a
separate account for each Participant (a "Trust
Account"), representing the portion of the
Trust Assets allocable to amounts that may be
payable to that Participant under the Plans.
All Contributions made after the Change in
Control, and all earnings on and increases to
the Trust Assets, shall be allocated among the
Trust Accounts as directed by the Committee.
Within sixty days after the end of each
calendar year following a Change in Control,
the Trustee shall provide the Company and the
Committee with a written statement of the Trust
Account of each Participant, and the Committee
shall deliver a copy of that statement to each
Participant.
(d) The Company shall promptly provide
the Committee with any and all information the
Committee reasonably requests or the Company
believes would be useful to the Committee in
carrying out its duties hereunder, and shall
promptly update such information as and if it
changes. The Company shall also use its best
efforts to cause each Participant to provide
the Committee with all information that it may
reasonably request in order to determine the
amount of any payments due to the Participant
under the Plans.
(e) The accounts, books and records
maintained pursuant to this paragraph 3.1 shall
be open to inspection and audit at all
reasonable times by the Company, the Committee
and the Participants.
ARTICLE 4
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Management and Control of Trust Assets
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4.1 Investments. The Trustee shall invest the
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Trust Assets in Permitted Investments as directed by the
Committee from time to time. Notwithstanding the
foregoing, the Trustee shall continue to invest in and hold
Company Shares which have been contributed to the Trust
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by the Company until such time as the Trustee is directed
by the Committee to distribute or otherwise dispose of such
Company Shares. All dividends or other distributions
received by the Trustee with respect to Company Shares
shall be reinvested by the Trustee in Company Shares unless
otherwise directed by the Committee.
4.2 Exercise of Trustee's Duties. The
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Trustee shall discharge its duties hereunder in the
interest of the Participants and their Beneficiaries, and
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.
4.3 General Powers. Subject to the express
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limitations and directions contained elsewhere in this
Trust Agreement, the Trustee shall have the following
powers, rights and duties in addition to those provided
elsewhere in this Trust Agreement or by law:
(a) to receive and hold all
Contributions made to it by the Company;
provided, however, that the Trustee shall have
no right or duty to require any such
Contributions to be made;
(b) to vote Company Shares personally
or by proxy in accordance with the directions
of the Committee;
(c) to purchase, hold, manage, sell,
exchange, invest, reinvest and otherwise deal
with the Trust Assets and any property forming
part of the Trust Assets, together with the
income therefrom, in such manner, for such
consideration and on such terms and conditions
as directed by the Committee;
(d) to retain in cash (pending
investment, reinvestment or distribution) any
reasonable portion of the Trust Assets and to
deposit cash in any depository (including
without limitation the depository department of
the Trustee if the Trustee is a bank or trust
company);
(e) to compromise, contest, arbitrate,
settle or abandon claims and demands relating
to the Trust Assets;
(f) to begin, maintain or defend any
litigation necessary in connection with the
administration of the Trust, and the Company
shall indemnify the Trustee against all
expenses and liabilities sustained or
anticipated by it by reason thereof;
(g) to hold securities or other
property in the name of the Trustee or any
nominee or nominees of the Trustee, or in such
other form as the Trustee shall determine, with
or without disclosing the Trust relationship,
provided that the records of the Trustee shall
indicate the actual ownership of such
securities
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or other property;
(h) to deposit securities with a
corporate depository, in which event the
certificates representing securities, including
those in bearer form, may be held in bulk form
with, and may be merged into, certificates of
the same class of the same issuer which
constitute assets of other accounts or owners,
without certification as to the ownership
attached; provided that the Trustee shall at
all times maintain a separate and distinct
record of the securities owned by
the Trust;
(i) to participate in and use a book-entry system for the
deposit and transfer of
securities;
(j) to retain any funds or property
subject to any dispute without liability for
the payment of interest, or to decline to make
payment or delivery thereof until final
adjudication is made by a court of competent
jurisdiction;
(k) to employ agents, counsel,
financial advisors, accountants or other
persons for such purposes as the Trustee
considers desirable;
(l) to furnish the Company with such
information in the Trustee's possession as the
Company may need for tax or other purposes; and
(m) to perform any and all other acts
which are, in the Trustee's judgment, necessary
or appropriate for the proper maintenance and
administration of the Trust Assets as though
the absolute owner thereof, and to exercise all
the further rights, powers, options and
privileges granted, provided or vested in
trustees generally under applicable federal or
state law, it being intended that, except as
herein otherwise provided, the powers conferred
upon the Trustee herein shall not be construed
as being in limitation of any authority
conferred by law, but shall be construed as in
addition thereto;
provided, however, that if an insurance policy is held as a
Trust Asset, the Trustee shall have no power to name as
beneficiary of that policy any person other than the Trust,
nor to assign the policy (as distinct from converting it to
a different form) to a person other than a successor
Trustee, nor to loan to any person other than the Trust the
proceeds of any borrowing against such policy; provided,
further, that notwithstanding any powers granted to the
Trustee under this Trust Agreement or applicable law, the
Trustee shall not have any power that could give this Trust
the objective of carrying on a business and dividing the
gains therefrom, within the meaning of Section 301.7701-2
of the Procedure and Administrative Regulations promulgated
pursuant to the Code.
4.4 Reliance Upon Written Communications.
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The Committee shall provide the Trustee with a written
certification identifying the person or persons authorized
to give
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instructions or directions on its behalf, and such
certification shall be effective until a written revocation
is filed with the Trustee. The Trustee may rely upon any
written communication by such persons with respect to any
instruction or direction of the Committee and may continue
to rely upon such written communication until a subsequent
written communication is filed with the Trustee. The
Trustee may act upon any instrument, written communication
or paper believed by the Trustee to be genuine and to be
signed or presented by the proper person or persons, and
the Trustee shall be under no duty to make any
investigation or inquiry as to any statement contained in
any such writing, but may accept the same as conclusive
evidence of the truth and accuracy of the statements
therein contained. In the event that any dispute shall
arise as to any act to be performed by the Trustee, the
Trustee may postpone performance until adjudication of such
dispute in a court of competent jurisdiction or until it
shall have been indemnified against loss to its
satisfaction.
ARTICLE 5---------
Distribution of Trust Assets
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5.1 Payments to Participants
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(a) The names, addresses, Beneficiary
designations, benefits commencement dates and
Accounts of the Participants as of the date
hereof (the "Payment Schedule") are set forth
on Schedule II hereto. Schedule II shall be
amended as frequently as necessary to ensure
that it is accurate and complete at all times.
Before a Change in Control, all necessary
amendments shall be made by the Company, and
after a Change in Control, they shall be made
by the Committee.
(b) The Company may make payments
pursuant to the Payment Schedule directly to
Participants. The Company shall notify the
Trustee of its intention to make any such
direct payment at least ten business days
before the date such payment is due. If the
Trustee does not receive such notice with
respect to any payment, or if at any time
following a Change in Control it receives a
notice from a Participant certifying that the
Company has failed to make a payment when due,
the Trustee shall promptly make such payment in
accordance with the Payment Schedule.
(c) When the Trustee is required by
paragraph (b) above to make a payment in the
form of property other than Company Shares or
cash, the Trustee shall, if necessary, acquire
such property from the Company or other sources
for fair market value in order to make such
payment. If the Trustee cannot acquire such
property, the Trustee shall promptly so notify
the Company and the Participant, and unless the
Participant directs otherwise, the Company
shall make such payment. If the Participant
gives the Trustee notice directing the Trustee
to pay the Participant in cash rather than in
the form of such property, the Trustee
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shall so notify the Company and shall pay the
Participant an amount of cash equal to the fair
market value (determined by the Trustee in its
sole discretion) of such property as of the
date such payment was due.
(d) If the Trust Assets are
insufficient to make any payment (including
interest thereon under paragraph (e) below)
that the Trustee is required to make pursuant
to paragraphs (b) or (c) above, the Trustee
shall promptly so notify the Company and the
Participant, and the Company shall make such
payment to the extent the Trust Assets are
insufficient.
(e) Any payment, whether made by the
Trustee or the Company, pursuant to paragraph
(b), (c) or (d) above, that is made after the
date it is due shall be accompanied by a cash
payment of interest at 120 percent of the
Applicable Federal Rate from the date the
payment is due through the date it is made,
computed on the amount of cash, plus the fair
market value as of the date the payment is due
of any other property, included in the payment.
The fair market value of the property shall be
determined by the Trustee in its sole
discretion.
(f) In making payment pursuant to this
paragraph 5.1, the Trustee shall be entitled to
rely on, and shall have no duty to inquire
into, any written certification by a
Participant that the Company has failed to make
a payment when due.
(g) The Trustee and the Company shall
promptly notify the Committee of all payments
made pursuant to this paragraph 5.1.
5.2 Distributions. As provided in paragraph
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3.1, but subject to the provisions of this paragraph 5.2
which follow, the Committee shall certify the time, manner,
amount and recipients of any distributions to Participants
and Beneficiaries of Trust Assets. Distributions shall be
subject to the following provisions:
(a) The Trustee shall have no
responsibility to inquire as to whether a
distributee is entitled to a distribution, or
as to whether a distribution is proper, and
shall have no liability for a distribution made
in good faith without actual notice or
knowledge that such distribution is improper.
(b) If any check for any distribution
directed to be made from Trust Assets has been
mailed by the Trustee by regular United States
mail to the last address of the distributee
furnished to the Trustee and is returned
unclaimed, the Trustee shall notify the
Committee of that fact and the Committee shall
direct the Trustee whether to attempt the
distribution by mail to another address. The
Trustee shall have no obligation to search for
or ascertain the whereabouts of any Participant
or Beneficiary.
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(c) The Trustee may reserve such
reasonable amount from any distribution as it
shall deem necessary to pay any estate,
inheritance, income, withholding or other tax,
charge or assessment attributable to such
distribution or may require such release or
other document from any taxing authority and
such indemnity from the intended distributee as
the Trustee shall deem necessary for its
protection.
5.3 Reversion to Company. Subject to the
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provisions of paragraphs 5.4 and 7.1, no part of the Trust
Assets shall revert to the Company or be used for, or
diverted to, purposes other than the exclusive benefit of
Participants and their Beneficiaries. Notwithstanding the
foregoing:
(a) if as of the end of any calendar
year the Company has paid any taxes described
in paragraph 5.2(c) and the Committee so
directs the Trustee within sixty days of the
end of such year, the Trustee shall return to
the Company Trust Assets in an amount equal to
such taxes paid by the Company;
(b) if at any time there shall be on
deposit with the Trustee Government Securities
and cash (which for this purpose includes money
market funds or certificates of deposit) which
the Committee certifies to the Trustee to be
sufficient, taking into account the respective
maturities of any such Government Securities
and assuming no reinvestment of any of the
proceeds thereof or of any such cash, to
provide for the payment of all amounts payable
under the Plans in cash at the times such
amounts are payable under the Plans plus
Company Shares which the Committee certifies to
the Trustee to be sufficient to provide for the
payment of all amounts payable under the Plans
in Company Shares, and the Committee so advises
the Trustee, the Trustee shall, if so directed
by the Committee, return all other Trust Assets
to the Company; and
(c) if all amounts payable under the
Plans have been fully paid and the Committee so
advises the Trustee, the Trustee shall return
all residual Trust Assets to the Company.
For purposes of clause (b) above, any amounts payable under
any Plan for the life of any individual shall be computed
based on the life expectancy of such individual determined
from the life expectancy tables set forth in the
regulations issued pursuant to Section 72 (or any successor
provision) of the Code.
5.4 Claims of Creditors. Trust Assets shall
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be treated as assets of the Company and shall be subject to
the claims of the general creditors of the Company. In the
event that any of the Trust Assets are at any time paid to
a creditor of the Company (including without limitation the
Trustee, in its capacity as such, but excluding a
Participant or a Beneficiary in his capacity as such), the
Trustee will immediately notify the Committee and the
Company will, within ten business days after receipt of
such notice, deposit equivalent assets with the Trustee as
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additional Trust Assets.
5.5 Notice to Trustee of Insolvency;
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Suspension of Distributions. The Company shall be
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considered "Insolvent" if (i) it is unable to pay its debts
as they mature, or (ii) an order for relief is entered
under Title 11 the United States Bankruptcy Code. The
Committee (or if the Committee fails to act, the Board or
chief executive officer of the Company) shall immediately
notify the Trustee in writing if the Company becomes
Insolvent. Upon receipt of any such notice and whenever
the Trustee has actual knowledge that the Company is
Insolvent, the Trustee shall immediately suspend any
further distributions from Trust Assets and shall hold the
Trust Assets for the benefit of the Company's general
creditors pending resumption of the Company's ability to
pay its debts as they mature, or the dismissal of such
proceedings or direction from the court before which such
proceedings are pending, as the case may be, or other
direction from a court of competent jurisdiction and shall
promptly notify the Participants that is is doing so. If
the Trustee receives written notice from any other person
or entity alleging that the Company has become Insolvent,
the Trustee shall immediately notify the Committee of its
receipt of such notice and shall immediately suspend any
further distributions from Trust Assets pending the
Trustee's determination that such allegation is not correct
(and upon receipt of such notice (and at any other time or
times if so requested by the Committee) the Trustee will
promptly undertake, and complete within thirty days after
commencing such undertaking, a determination whether the
Company is in fact Insolvent). For this purpose, the
Trustee may rely on a certification from the Company's
auditor. In the event that such auditor declines to
provide such certification, the Trustee may rely on a
certification from any national public accounting firm. In
making its determination, the Trustee may rely on and is
fully protected in relying on a certification from such
auditor. During any period when payments to the
Participants are suspended under this paragraph 5.5, the
Trustee may nevertheless pay its compensation and expenses
and taxes payable by the Trust in accordance with paragraph
7.1, unless it receives a court order to the contrary. If
the Company subsequently ceases to be Insolvent without the
entry of a court order concerning the disposition of the
Trust Assets, the Company shall give notice to the Trustee
and the Participants (i) stating that the Company is no
longer Insolvent and (ii) setting forth the extent to which
the Company has made directly to the Participants any
payments under the Payment Schedule that became due during
the period that the Trustee had suspended payments. The
Trustee shall thereupon resume payments pursuant to Article
5, including payments that became due during the period of
suspension and were not made by the Company.
5.6 Alienation. The rights and benefits of
----------
the Participants or Beneficiaries under this Trust
Agreement, and the payments to the Participants or
Beneficiaries from the Trust Assets, may not be
anticipated, assigned, alienated or subject to attachment,
garnishment, levy, execution or other legal or equitable
process. Any attempt by a Participant to anticipate,
alienate, assign, sell, transfer, pledge, encumber or
charge the same shall be void. The Trust Assets shall not
in any manner be subject to the debts, contracts,
liabilities, engagements or torts of any Participant, and
payments hereunder shall not be considered assets of any
Participant in the event of insolvency or bankruptcy.
14
ARTICLE 6
----------
Tax Matters
------------
6.1 Nature of Trust. This Trust Agreement is
----------------
intended to constitute a grantor Trust as described under
Section 671 of the Code . Without limiting the effect of
the preceding sentence, for federal income tax purposes the
Company will include, in computing its taxable income and
credits, those items of income, deductions and credits
against tax of the Trust that are attributable to the Trust
while it is a grantor trust (to the extent that such items
could be taken into account in computing the taxable income
or credits against the tax).
6.2 Reporting Requirements. The Trustee
----------------------
shall withhold federal, state and local income and
employment taxes which are assessable on amounts paid by it
to a Participant or a Beneficiary at the appropriate rates
under applicable laws, or at such higher rates as may be
requested by the Participant or Beneficiary in writing to
the Trustee, and shall transmit the amounts withheld to the
Company which shall transmit the amounts withheld to the
applicable taxing authorities. The Trustee shall furnish
to the Committee and the Participants and Beneficiaries all
withholding and benefit payment information as soon as
practicable after the end of each calendar year. The
Committee shall provide the Trustee with all necessary
information in order for the Trustee to comply with this
paragraph 6.2.
6.3 Taxation Prior to Receipt. If the
--------------------------
Internal Revenue Service makes a determination that a
Participant or Beneficiary is subject to federal income
taxation on any amount held in the Trust in a calendar year
prior to the calendar year in which he would otherwise
receive benefits under the corresponding Plan, and if all
appeals (judicial or otherwise) of such determination
available to the Company have been exhausted or waived, the
Committee shall, at the written request of the Participant
or Beneficiary accompanied by evidence satisfactory to the
Committee of such tax treatment, notify the Trustee thereof
and direct the Trustee to distribute such amount to the
Participant or Beneficiary as soon thereafter as
practicable.
ARTICLE 7
---------
Compensation, Expenses and Liability
------------------------------------
7.1 Compensation and Expenses. All
--------------------------
reasonable costs, charges and expenses incurred by the
Trustee in connection with the administration of the Trust,
including such reasonable compensation of the Trustee as
may be agreed upon from time to time between the Committee
and the Trustee, shall be paid by the Company; provided
that if the Company shall fail to pay the same upon written
demand from the Trustee, the Trustee, as a creditor of the
Company, may pay the same from the Trust Assets. To the
extent that any taxes are payable by the Trust to any
federal, state, local or foreign taxing authorities on
account of earnings on or transactions involving Trust
Assets, such taxes shall be paid by the Company and if not
so paid, shall be paid by the Trustee from Trust Assets.
The Trustee may consult with legal counsel
15
(who may also be counsel for the Company) with respect to
any of its duties or obligations hereunder, and shall be
fully protected in acting or refraining from acting in
accordance with the advice of such counsel, and the Company
shall be responsible for the payment of any such expenses
and compensation. The Trustee may hire agents, accountants
and financial consultants, and the Company shall be
responsible for the payment of their expenses and
compensation. Such compensation, expenses and taxes shall
be paid by the Company and if not so paid, shall be paid by
the Trustee from the Trust Assets. In the event any Trust
Assets are used pursuant to the preceding sentences to pay
compensation, expenses or taxes, the Trustee shall so
notify the Company and the Company shall promptly
contribute to the Trust the amount of such payments, plus
interest thereon at 120 percent of the Applicable Federal
Rate, from the date of such use through the date of the
contribution.
7.2 Liability of Trustee. The Trustee shall
--------------------
not be liable for any act or failure to act under this
Trust Agreement unless such action or failure to act was in
willful violation of the law.
7.3 Indemnification. To the extent permitted
----------------
by law, no Trustee (including any former Trustee) shall be
personally liable for any act done or omitted to be done in
good faith in the administration of the Trust or the
investment of the Trust Assets. To the extent permitted by
law, each present or former Trustee shall be indemnified
and saved harmless by the Company (to the extent not
indemnified or saved harmless under any liability insurance
or other indemnification arrangement with respect to the
Plans or the Trust) from and against any and all claims of
liability to which it is subjected by reason of any act
done or omitted to be done in good faith in connection with
the administration of the Trust or the investment of the
Trust Assets, including all expenses reasonably incurred in
its defense if the Company fails to provide such defense.
Each present or former Trustee shall be indemnified and
saved harmless by the Company from and against any and all
liability to which such Trustee shall be subjected by
reason of carrying out any directions of the Committee made
in accordance with this Trust Agreement, including all
expenses reasonably incurred in its defense if the Company
fails to provide such defense.
ARTICLE 8----------
Changes of Trustee ----------------------
8.1 Resignation or Removal of Trustee. A
----------------------------------
Trustee may resign at any time by giving thirty days'
advance written notice to the Committee, and the Committee
may remove any Trustee by giving thirty days' advance
written notice to the Trustee.
8.2 Appointment of Successor Trustee. In the
--------------------------------
event of the resignation or removal of a Trustee, a
successor Trustee shall be appointed by the Committee as
soon as practicable.
Notice of any such appointment shall be given by the
Committee to the retiring Trustee and the successor
Trustee. A successor Trustee shall be limited to a bank or
trust company with assets under management of at least $3
billion.
16
8.3 Duties of Retiring and Successor
---------------------------------
Trustee. In the event of the resignation or removal of a
-------
Trustee, the retiring Trustee shall promptly furnish to the
Committee and the successor Trustee a final account of its
administration of the Trust. A successor Trustee shall
succeed to the right and title of the predecessor Trustee
in the Trust Assets and the retiring Trustee shall deliver
to the successor Trustee the property comprising the Trust
Assets, together with any instruments of transfer,
conveyance, assignment and further assurance as the
successor Trustee may reasonably require, and the books and
records of the retiring Trustee relating to the
administration of the Trust. Each successor Trustee shall
have all the powers, rights and duties conferred by this
Trust Agreement as if originally named a Trustee. To the
extent permitted by law, no successor Trustee shall be
personally liable for any act or failure to act of a
predecessor Trustee.
ARTICLE 9----------
Miscellaneous--------------
9.1 Action by the Committee. Any action with
-----------------------
respect to the Trust required or permitted to be taken by
the Committee (including without limitation the giving of
any direction to the Trustee) shall be taken by resolution
of the Committee or by a person or persons authorized by
resolution of the Committee (whose action shall be deemed
action by the Committee).
9.2 Disagreement as to Acts. If there is a
-----------------------
disagreement between the Trustee and anyone as to any act
or transaction reported in any accounting, the Trustee
shall have the right to have its account settled by a court
of competent jurisdiction.
9.3 Persons Dealing with Trustee. No person
----------------------------
dealing with the Trustee shall be required to see to the
application of any money paid or property delivered to the
Trustee or to determine whether or not the Trustee is
acting pursuant to any authority granted under this Trust
Agreement.
9.4 Evidence. Evidence required of anyone under
--------
this Trust Agreement may be by certificate, affidavit,
document or other instrument which the person acting in
reliance thereon considers pertinent and reliable and
signed, made or presented by the proper party.
9.5 Waiver of Notice. Any notice required under
----------------
this Trust Agreement may be waived by the person entitled
thereto.
9.6 Counterparts. This Trust Agreement may be
------------
executed in counterparts, each of which shall be deemed an
original, and no counterparts need be produced.
9.7 Governing Laws. This Trust Agreement shall be
--------------
construed and administered according to the laws of the
State of Wisconsin.
17
9.8 Successors, Etc. The provisions of this Trust
----------------
Agreement shall be binding on the Company, its successors
and assigns and the initial Trustee and its successors and
on all persons entitled to benefits under any of the Plans
or the Trust and their respective heirs and legal
representatives.
9.9 Service of Legal Process. If the Trustee
------------------------
receives service of summons, subpoena or other legal
process of any court with respect to any action relating to
this Trust Agreement, it shall, as soon as practicable,
inform the Committee of such service and, at the request of
the Committee, shall promptly provide the Committee with a
copy of the document served.
ARTICLE 10-----------
Amendment and Termination -------------------------
10.1 Amendment. This Trust Agreement may be amended
---------
from time to time by the Committee and the Trustee without
the consent of any Participant or any existing or future
Beneficiary, whether or not identified, (i) to cure any
defect, ambiguity or internal inconsistency, (ii) to impose
additional obligations on the Company or the Trustee for
the benefit of the Participants and their Beneficiaries,
(iii) to alter the standard of care imposed on the Trustee
in the exercise of its duties, or (iv) to cause the Trust
to qualify or continue to qualify as a so-called "rabbi
trust" for purposes of the Code; but otherwise this Trust
Agreement may be amended (including without limitation to
add any additional Plan or program to the definition of
"Plans" following a Change in Control) by the Company and
the Trustee only with the consent of each then existing
Participant and each then existing and identified
Beneficiary; provided that under no condition shall an
amendment result in the return or repayment to the Company
of any part of the Trust Assets or result in the
distribution of any of the Trust Assets to anyone other
than a Participant or a Beneficiary.
10.2 Termination. This Trust Agreement shall not
------------
terminate until the date on which all benefits payable
under the Plans and all expenses of the Trust have been
paid. If the Plans are terminated, all of the provisions
of the Trust nevertheless shall continue in effect until
the Trust Assets have been distributed by the Trustee.
10.3 Severability. Any provision of this Trust
------------
Agreement prohibited by law shall be ineffective to the
extent of any such prohibition without invalidating or in
any other way limiting the remaining provisions hereof.
ARTICLE 11-----------
Non-Applicability of ERISA---------------------------
Notwithstanding that certain terms and phrases
used in this Trust Agreement are also used in ERISA,
neither this Agreement nor the Trust is, or is intended to
be, subject to the provisions of ERISA, and no rights,
duties, obligations or restrictions created or imposed by
ERISA shall
18
be created in favor of or imposed on the Company, the
Trustee, any Participant, any Beneficiary or any other
person or entity on account of the use of such terms and
phrases.
19
IN WITNESS WHEREOF, the Company and the Trustee
have each caused this Trust Agreement, as amended and
restated as of October 9, 1995, to be signed by its duly
authorized officers and its corporate seal to be hereunto
affixed.
HARNISCHFEGER INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Grade
-------------------------
Xxxxxxx X. Grade
Its: Chairman and Chief
Executive Officer
By: /s/ Xxxx Xxxx Xxxxxx
--------------------------
Xxxx Xxxx Xxxxxx
Its: Executive Vice President and
Chief Operating Officer
By: /s/ K. Xxxx Xxxxxxxx
---------------------------
K. Xxxx Xxxxxxxx
Its: Executive Vice President for
Law and Government Affairs
By: /s/ Xxxxxxx X. Xxxxx, Xx.
----------------------------
Xxxxxxx X. Xxxxx, Xx.
Its: Executive Vice President for
Finance and Administration
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Its: Senior Vice President and
Special Advisor to the
Chairman and CEO
As members of the Management
Policy Committee of
Harnischfeger Industries, Inc.
XXXXXXXX & XXXXXX TRUST COMPANY,
as Trustee
By:/s/ Xxxxxxx Xxxxx
Its: Vice President
ATTEST:
Its: /s/Xxxx X. Xxxx
Trust Officer
(SEAL)
