TRUST AGREEMENT
This Agreement is made this 3rd day of June 1996 by and between Xxxxxx Wire
& Cable Company ("Company") and Boatmen's Trust Company ("Trustee").
Introduction
The Company has adopted the nonqualified deferred compensation plans
("Plans") listed in Appendix A and has incurred or expects to incur
liabilities under the Plans to those individuals participating in them.
The Company wishes to establish a trust ("Trust") and to contribute to the
Trust assets which shall be held in trust, subject to the claims of the
Company's creditors in the event of the Company's Insolvency (as defined
below), until paid to Plan participants and their beneficiaries in the
manner and at the times specified in the Plans.
The parties intend that this Trust shall constitute an unfunded arrangement
and shall not affect the status of the Plans as unfunded plans maintained
to provide deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee Retirement
Income Security Act of 1974.
The Company intends to make contributions to the Trust to provide itself
with a source of funds to help it meet its liabilities under the Plans.
NOW, the parties do establish the Trust in accordance with the following:
1. Establishment of Trust
1.1 The Company deposits with the Trustee in trust $500, the
principal of the Trust, to be held, administered and disposed of
by the Trustee as provided in this Agreement.
1.2 T h e Trust is revocable by the Company; it shall become
irrevocable upon a Change of Control (as defined in Section 13.4
below).
1.3 The Trust is intended to be a grantor trust. The Company 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, and shall be construed accordingly.
1.4 The principal of the Trust, and any earnings thereon, shall be
held separate and apart from other funds of the Company and shall
b e used exclusively for the uses and purposes of Plan
participants and general creditors as noted below. Plan
participants and their beneficiaries shall have no preferred
claim on, or any beneficial ownership interest in, any assets of
the Trust. Any rights created under the Plans and this Agreement
shall be mere unsecured contractual rights of Plan participants
and their beneficiaries against the Company. Any assets held by
the Trust will be subject to the claims of the Company's general
creditors under federal and state law in the event of Insolvency,
as defined in Section 3.1 below.
1.5 Within thirty days following a Change of Control (as defined below),
the Company shall make an irrevocable contribution to the Trust in
an amount that is sufficient to pay all Plan participants and their
beneficiaries the aggregate accrued benefits to which they would be
entitled pursuant to the Plans as of the date of the Change of
Control (whether or not they are then entitled to receive such
accrued benefits), and shall thereafter make further irrevocable
contributions to the Trust on a current basis as and in the amount
that such benefits accrue.
2. Payments to Plan Participants and Their Beneficiaries.
2.1 As and when payable pursuant to the Plans, the Company shall
promptly furnish to the Trustee a schedule ("Payment Schedule")
that shows (i) the amounts payable to each Plan participant (and
his or her beneficiaries), (ii) a formula or other instructions
acceptable to the Trustee for determining the amounts so payable,
(iii) the form in which such amounts are to be paid (as provided
for or available under the Plans), and (iv) the time of
commencement for payment of such amounts. Except as otherwise
provided in this Agreement, the Trustee shall make payments to
the Plan participants and their beneficiaries in accordance with
such Payment Schedule. The Trustee shall make provisions for the
reporting and withholding of any federal, state or local taxes
that may be required to be withheld with respect to the payment
of benefits pursuant to the Plans and shall pay amounts withheld
to the appropriate taxing authorities or determine that such
amounts have been reported, withheld and paid by the Company.
2.2 The entitlement of a Plan participant or his or her beneficiaries
to benefits under the Plans shall be determined by the Company or
such party as it shall designate under the Plans, and any claim
for such benefits shall be considered and reviewed under the
procedures set out in the Plans.
2.3 The Company may pay benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the
Plans. The Company shall notify the Trustee of its decision to
pay benefits directly prior to the time amounts are payable to
participants or their beneficiaries. In addition, if the
principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the
terms of the Plans, the Company shall make the balance of each
such payment as it falls due. The Trustee shall notify the
Company when principal and earnings are not sufficient.
3. Trustee's Responsibilities to Trust Beneficiary When Company is
Insolvent.
3.1 The Trustee shall stop paying benefits to Plan participants and
their beneficiaries if the Company is Insolvent. The Company
shall be considered "Insolvent" for purposes of this Agreement if
(i) the Company is unable to pay its debts as they become due, or
(ii) the Company is subject to a pending proceeding as a debtor
under the United States Bankruptcy Code.
-2-
3.2 At all times during the continuance of this Trust, as provided in
Section 1.4 above, the principal and income of the Trust shall be
subject to claims of general creditors of the Company under
federal and state law as set forth below:
3.2.1 The Board of Directors and the Chief Executive Officer
of the Company shall have the duty to inform the
Trustee in writing of their view that the Company is
Insolvent. If the Board of Directors of the Company,
the Chief Executive Officer or other employee of the
Company, or a person claiming to be a creditor of the
Company, alleges in writing to the Trustee that the
C o mpany has become Insolvent, the Trustee shall
determine whether the Company is Insolvent and, pending
such determination, the Trustee shall discontinue
payment of benefits to Plan participants or their
beneficiaries.
3.2.2. U n less the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the
Company or a person claiming to be a creditor alleging
that the Company is Insolvent, the Trustee shall have
no duty to inquire whether the Company is Insolvent.
The Trustee may in all events rely on such evidence
concerning the Company's solvency as may be furnished
to the Trustee and that provides the Trustee with a
reasonable basis for making a determination concerning
the Company's solvency.
3.2.3 If, at any time, the Trustee has determined that the
Company is Insolvent, the Trustee shall discontinue
payments to Plan participants or their beneficiaries
and shall hold the assets of the Trust for the benefit
of the Company's general creditors. Nothing in this
Trust Agreement shall in any way diminish any rights of
Plan participants or their beneficiaries to pursue
their rights as general creditors of the Company with
respect to benefits due under the Plans or otherwise.
3.2.4 The Trustee shall resume the payment of benefits to
Plan participants or their beneficiaries in accordance
with Section 2 of this Agreement only after the Trustee
has determined that the Company is not Insolvent (or is
no longer Insolvent).
3.3 Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to
Section 3.2 above and subsequently resumes such payments, the
first payment following such discontinuance shall include the
aggregate amount of all payments due to Plan participants or
their beneficiaries under the terms of the Plans for the period
of such discontinuance, less the aggregate amount of any payments
made to Plan participants or their beneficiaries by the Company
in lieu of the payments provided for under this Agreement during
any such period of discontinuance.
-3-
4. Payments to Company.
Except as provided in Section 3 above, after the Trust has become
irrevocable, the Company shall have no right or power to direct the
Trustee to return to the Company or to divert to others any of the
Trust assets before all payments of accrued benefits (present and
f u t u re) have been made to all Plan participants and their
beneficiaries pursuant to the terms of the Plans.
5. Investment Authority
In no event may the Trustee invest in securities (including stock or
rights to acquire stock) or obligations issued by the Company, other
than a de minimis amount held in common investment vehicles in which
the Trustee invests. All rights associated with assets of the Trust
shall be exercised by the Trustee or the person designated by the
Trustee, and shall in no event be exercisable by or rest with Plan
participants.
6. Disposition of Income.
During the term of this Trust, all of the income received by the
Trust, net of expenses and taxes, shall be accumulated and reinvested.
7. Accounting by Trustee.
T h e 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 the Company and the Trustee. Within 30
days following the close of each calendar year and within 30 days
after the removal or resignation of the Trustee, the Trustee shall
deliver to the Company 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 shown
separately), 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.
-4-
8. Responsibility of Trustee.
8.1 The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and
with like aims. However, the Trustee shall not incur any
liability to any person for any action taken pursuant to a
direction, request or approval given by the Company which is
contemplated by, and in conformity with, the terms of the Plans
or this Trust and is given in writing by the Company. In the
event of a dispute between the Company and a party, the Trustee
may apply to a court of competent jurisdiction to resolve the
dispute.
8.2 If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify the
Trustee against the Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses)
relating thereto and to be primarily liable for such payments.
If the Company does not pay such costs, expenses and liabilities
in a reasonably timely manner, the Trustee may obtain payment
from the Trust.
8.3 The Trustee may consult with legal counsel (who may also be
counsel for the Company generally) with respect to any of its
duties or obligations under this Agreement.
8.4 The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist
it in performing any of its duties or obligations under this
Agreement.
8.5 The Trustee shall have, without exclusion, all powers conferred
in Trustees by applicable law, unless this Agreement expressly
provides otherwise. However, 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, or to loan to any person
the proceeds of any borrowing against such policy.
8.6 Notwithstanding any powers granted to the Trustee pursuant to
this Agreement or to 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 Internal Revenue Code.
9. Compensation and Expenses of Trustee.
The Company shall pay all administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from
the Trust.
-5-
10. Resignation and Removal of Trustee.
10.1 The Trustee may resign at any time by written notice to the
Company, which shall be effective 30 days after receipt of such
notice unless the Company and Trustee agree otherwise.
10.2 The Trustee may be removed by the Company on 7 days' notice or
upon shorter notice accepted by the Trustee.
10.3 Upon a Change of Control, the Trustee may not be removed by the
Company for four years.
10.4 If the Trustee resigns within four years following a Change of
Control, the Trustee shall select a successor Trustee in
accordance with the provisions of Section 11.2 below prior to the
effective date of Trustee's resignation or removal.
10.5 Upon 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
30 days after receipt of notice of resignation, removal or
transfer, unless the Company extends the time limit.
10.6 If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 below, by the effective
date of resignation or removal under paragraphs 10.1 or 10.2 of
this section. 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.
11. Appointment of Successor.
11.1 If the Trustee resigns or is removed in accordance with Sections
10.1 or 10.2 above, the Company may appoint any third party
which is a bank trust department or other entity that may be
granted corporate trustee powers under state law, as a successor
to replace the Trustee upon resignation or removal. The
appointment shall be effective when accepted in writing by the
new Trustee, who 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 the Company or the successor Trustee to
evidence the transfer.
11.2 If the Trustee resigns pursuant to the provisions of Section 10.4
above and selects a successor Trustee, Trustee may appoint any
third party which is a bank trust department or other entity that
may be granted corporate trustee powers under state law. The
appointment of a successor Trustee shall be effective when
accepted in writing by the new Trustee. The new Trustee shall
have all the rights and powers of the former Trustee, including
ownership rights in Trust assets. The former Trustee shall
execute any instrument necessary or reasonably requested by the
successor Trustee to evidence the transfer.
-6-
11.3 The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust
assets, subject to Sections 7 and 8 above. The successor Trustee
shall not be responsible for and the Company 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.
12. Amendment or Termination.
12.1 The Agreement may be amended by a written instrument executed by
the Trustee and the Company. However, no such amendment shall
conflict with the Plans or shall make the Trust revocable after
it has become irrevocable in accordance with Section 1.2 above.
12.2 The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to
any accrued benefits (present or future) pursuant to the Plans,
unless sooner revoked in accordance with Section 1.2 above. Upon
termination of the Trust, any assets remaining in the Trust shall
be returned to Company.
12.3 Following a Change of Control, no provision of Sections 1, 2, 3,
4, 5, 6, 10 or 12 of this Agreement may be amended unless all
P l an participants (and their beneficiaries as applicable)
unanimously agree in writing to any such amendment.
13. Miscellaneous.
13.1 Any provision of this Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without
invalidating the remaining provisions of this Agreement.
13.2 Benefits payable to Plan participants and their beneficiaries
under this 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.
13.3 This Agreement shall be governed by and construed in accordance
with the laws of Delaware.
-7-
13.4 For purposes of this Trust, the term "Change of Control" shall
mean (i) the occurrence of a Triggering Event under the Rights
Agreement of July 6, 1995 between Xxxxxx Inc. and the First
Chicago Trust Company of New York, as such Rights Agreement may
be assigned or amended, or (ii) the purchase or other acquisition
by any person, entity or group thereof, within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934
("Act"), or any comparable successor provisions, of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Act) of 30 percent or more of either the outstanding shares of
common stock or the combined voting power of Company's then
outstanding voting securities entitled to vote generally, (iii)
t h e approval by the stockholders of the Company of a
reorganization, merger, or consolidation, in each case, with
respect to which persons who were stockholders of Company
immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than 50 percent of the
combined voting power entitled to vote generally in the election
of directors of the reorganized, merged or consolidated Company's
then outstanding securities, or (iv) a liquidation or dissolution
of Company or of the sale of all or substantially all of
Company's assets.
14. Effective Date.
The effective date of this Trust Agreement shall be June 3, 1996.
COMPANY:
XXXXXX WIRE & CABLE COMPANY
By:______________________________
Name:____________________________
Title:_____________________________
TRUSTEE:
By:______________________________
Name:____________________________
Title:_____________________________
-8-
Appendix A
to the
Trust Agreement
between
Xxxxxx Wire& Cable Company
and
Boatmen's Trust Company
Schedule of Plans
Xxxxxx Wire & Cable Company Supplemental Excess Defined Benefit Plan
Xxxxxx Wire & Cable Company Supplemental Excess Defined Contribution Plan
Xxxxxx Wire & Cable Company Management Incentive Deferral Plan
-9-
