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X. X. XXXXX CO.
DEFERRED COMPENSATION TRUST
THIS AGREEMENT made this ____ day of __________, 199___, by and between X.
X. XXXXX CO. ("Company") and ____________________________________ ("Trustee");
WHEREAS, Company has adopted the nonqualified deferred compensation
agreements or plans (the "Plan(s)") as listed in Appendix A; and
WHEREAS, Company has incurred or expects to incur liability under the
terms of such Plan(s) with respect to the individuals participating in such
Plan(s); and
WHEREAS, Company wishes to establish a trust (hereinafter called "Trust")
and to contribute to the Trust assets to be held therein, subject to the claims
of the creditors of the Company in the event of Insolvency, as herein defined,
of the Company until paid to Plan participants and their beneficiaries in such
manner and at such times as specified in the Plan(s); and
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the
Plan(s) as an unfunded plan maintained for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
for purposes of Title I of the Employee Retirement Income Security Act of 1974;
and
WHEREAS, it is the intention of Company to make contributions to the Trust
to provide a source of funds to assist in the meeting of the liabilities under
the Plan(s);
NOW, THEREFORE, the parties do hereby create the Trust and agree that the
Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST
(a) Company hereby deposits with Trustee $100, which shall become the
principal of the Trust to be held, administered and disposed of by Trustee as
provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which Company is the
grantor, within the meaning of subpart E, part 1, subchapter J, chapter 1,
subtitle A of the Internal Revenue Code of 1986, as amended, and shall be
construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively
for the uses and purposes of Plan participants and general creditors as herein
set forth. 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 Plan(s) and this Trust Agreement shall be mere
unsecured contractual rights of Plan participants and their beneficiaries
against Company. Any assets held by the Trust will be subject to the claims of
general creditors of the Company under federal and state law in the event of
Insolvency, as defined in Section 3(a) herein.
(e) Company, in its sole discretion, may at any time, or from time to
time, make additional deposits of cash or other property in Trust with Trustee
to augment the principal to be held, administered and disposed of by Trustee as
provided in this Trust Agreement. Neither Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.
(f) Upon a Change of Control, Company shall, as soon as possible, but
in no event longer than 30 days following the Change of Control, as defined
herein, make an irrevocable contribution to the Trust in an amount that is
sufficient, when added to existing Trust assets, to pay each Plan participant
or beneficiary the benefits to which Plan participants or their beneficiaries
would be entitled pursuant to the terms of the Plan(s)
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as of the date on which the Change of Control occurred. Thereafter, within 30
days following the end of each calendar year, the Company shall make an
irrevocable contribution in an amount sufficient, when added to existing Trust
assets, to pay each Plan participant or beneficiary the benefits payable
pursuant to the terms of the Plan(s) as of the close of that calendar year.
ALTERNATIVE: [(f) Within 30 days following the end of the Plan year(s) ending
after the Trust has become irrevocable pursuant to Section 1(b) hereof, Company
shall be required to irrevocably deposit additional cash or other property to
the Trust in an amount sufficient to pay each Plan participant or beneficiary
the benefits payable pursuant to the terms of the Plan(s) as of the close of
the Plan year(s).]
SECTION 2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) Company shall deliver to Trustee a schedule (the "Payment Schedule")
that indicates the amounts payable in respect of each Plan participant (and his
or her beneficiaries), that provides a formula or other instructions acceptable
to Trustee for determining the amounts so payable, the form in which such
amount is to be paid (as provided for or available under the Plan(s)), and the
time of commencement for payment of such amounts. Except as otherwise provided
herein, Trustee shall make payments to the Plan participants and their
beneficiaries in accordance with such Payment Schedule. Trustee shall make
provision 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 terms of the Plan(s) and shall pay amounts withheld to
the appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by Company.
(b) The entitlement of a Plan participant or his or her beneficiaries to
benefits under the Plan(s) shall be determined by Company or such party as it
shall designate under the Plan(s), and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan(s).
(c) Company may make payment of benefits directly to Plan participants or
their beneficiaries as they become due under the terms of the Plan(s). Company
shall notify Trustee of its decision to make payment of benefits directly prior
to the time amounts are payable to participants or their beneficiaries. In
addition, if the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms of the
Plan, Company shall make the balance of each such payment as it falls due.
Trustee shall notify Company where principal and earnings are not sufficient.
SECTION 3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY WHEN
COMPANY IS INSOLVENT.
(a) Trustee shall cease payment of benefits to Plan participants and their
beneficiaries if Company or any contributing subsidiary is Insolvent. Whenever
the term "Company" is used in this Section 3, it shall also be deemed to mean
any contributing subsidiary of the Company. Company shall be considered
"Insolvent" for purposes of this Trust Agreement if (i) Company is unable to
pay its debts as they become due, or (ii) Company is subject to a pending
proceeding as a debtor under the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be subject to
claims of general creditors of Company under federal and state law as set forth
below.
(1) The Board of Directors and the Chief Executive Officer of Company
shall have the duty to inform Trustee in writing of Company's
Insolvency. If a person claiming to be a creditor of Company alleges in
writing to Trustee that Company has become Insolvent, Trustee shall
determine whether Company is Insolvent and, pending such determination,
Trustee shall discontinue payment of benefits to Plan participants or
their beneficiaries.
(2) Unless Trustee has actual knowledge of Company's Insolvency, or has
received notice from Company or a person claiming to be a creditor
alleging that Company is Insolvent, Trustee shall have no duty to inquire
whether Company is Insolvent. Trustee may in all events rely on such
evidence
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concerning Company's solvency as may be furnished to Trustee and that
provides Trustee with a reasonable basis for making a determination
concerning Company's solvency.
(3) If at any time Trustee has determined that Company is Insolvent,
Trustee shall discontinue payments to Plan participants or their
beneficiaries and shall hold the assets of the Trust for the benefit of
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 Company with respect to
benefits due under the Plan(s) or otherwise.
(4) Trustee shall resume the payment of benefits to Plan participants
or their beneficiaries in accordance with Section 2 of this Trust Agreement
only after Trustee has determined that Company is not Insolvent (or is no
longer Insolvent).
(c) Provided that there are sufficient assets, if Trustee discontinues the
payment of benefits from the Trust pursuant to Section 3(b) hereof and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan(s) for the
period of such discontinuance, less the aggregate amount of any payments made
to Plan participants or their beneficiaries by Company in lieu of the payments
provided for hereunder during any such period of discontinuance.
SECTION 4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, after the Trust has become
irrevocable, Company shall have no right or power to direct Trustee to return
to Company or to divert to others any of the Trust assets before all payment of
benefits have been made to Plan participants and their beneficiaries pursuant
to the terms of the Plan(s). Any Trust assets held in separate bookkeeping
account for a participant or beneficiary under the terms of a separate Plan may
be returned to Company only after all payment of benefits under the terms of
that separate Plan have been made.
SECTION 5. INVESTMENT AUTHORITY.
(a) Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued by Company. All rights associated with
assets of the Trust shall be exercised by Trustee or the person designated by
Trustee, and shall in no event be exercisable by or rest with Plan
participants. Company shall have the right at any time, and from time to time
in its sole discretion, to substitute assets of equal fair market value for an
asset held by the Trust. This right is exercisable by Company in a
nonfiduciary capacity without the approval or consent of any person in a
fiduciary capacity.
(b) Subject to (a) above, Trustee shall invest and reinvest the principal
and income of the Trust fund in any and all common stocks, preferred stocks,
bonds, notes, debentures, mortgages, equipment trust certificates, investment
trust certificates, common, collective or group trust investments or mutual
fund investments (including any such trusts or funds as may be established by
Trustee or any of its affiliates), real and personal property wherever
situated, and in such other property, investments and securities of any kind,
class or character as Trustee may deem suitable for the Trust, including one or
more life insurance policies. Trustee shall have the power, in its sole
discretion, to do all such acts, execute all such instruments, take all such
proceedings and exercise all rights and privileges with respect to any property
or asset constituting a part of the Trust fund as if Trustee were the absolute
owner thereof.
SECTION 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net of
expenses and taxes, shall be accumulated and reinvested.
SECTION 7. ACCOUNTING BY TRUSTEE.
With respect to the Trust fund and each Plan, Trustee shall keep or cause
to be maintained accurate and detailed accounts of all investments, receipts
and disbursements and other transactions hereunder, and all accounts, books and
records relating thereto shall be open to inspection and audit at all
reasonable times by any
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person or persons designated by Company. Trustee shall file with Company
annually or more frequently if requested a written report setting forth all
investments, receipts and disbursements, and other transactions effected by
Trustee to the date covered by the report, and showing all cash and other
property held at the end of such period. In the case of any Plan which
provides for a separate bookkeeping account for the interests of each
participant therein, Trustee shall maintain such separate account records for
each participant and beneficiary as it considers necessary or desirable for
the proper administration of the Trust.
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) Company shall indemnify and hold Trustee harmless from and against
any claim, loss or expense (including reasonable counsel fees) arising out of
anything done or omitted by Trustee in reliance on the directions (or the
absence of any directions) of Company.
(b) Trustee may consult with legal counsel, who may be counsel for
Company or in the employ of Company, in respect to any of its rights, duties and
obligations hereunder and shall be fully protected in acting or refraining from
acting in accordance with the advice of such counsel.
(c) Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
(d) 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 a asset of the Trust,
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, to the insured if such
assignment is directed by Company on a Payment Schedule, or to the Company at
any time after all payment of benefits have been made to Plan participants
pursuant to the terms of the Plan(s), or to loan to any person the proceeds of
any borrowing against such policy.
(e) Notwithstanding any powers granted to Trustee pursuant to this Trust
Agreement or to applicable law, 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.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
Company shall pay all administrative and Trustee's fees and expenses as
shall be agreed to from time to time by Company. If not so paid, the fees and
expenses shall be paid from the Trust.
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company, which
shall be effective 60 days after receipt of such notice unless Company and
Trustee agree otherwise.
(b) Trustee may be removed by Company on 60 days' notice or upon shorter
notice accepted by Trustee.
(c) Upon resignation or removal of Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed within 120 days after
receipt of notice of resignation removal or transfer, unless Company extends
the time limit.
(d) If Trustee resigns or is removed, a successor shall be appointed, in
accordance with Section 11 hereof, by the effective date of resignation or
removal under paragraphs (a) or (b) of this section. If no such appointment
has been made, Trustee may apply to a court of competent jurisdiction for
appointment of a
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successor or for instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
SECTION 11. APPOINTMENT OF SUCCESSOR.
If Trustee resigns or is removed in accordance with Section 10(a) or (b)
hereof, Company may appoint any bank or trust company to replace 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
Company or the successor Trustee to evidence the transfer.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument executed
by Trustee and Company. Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Plan(s) or shall make the Trust revocable after
it has become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Plan
participants and their beneficiaries are no longer entitled to benefits
pursuant to the terms of the Plan(s). Upon termination of the Trust any assets
remaining in the Trust shall be returned to Company.
(c) Upon written approval of participants or beneficiaries entitled to
payment of benefits pursuant to the terms of the Plan(s), Company may terminate
this Trust prior to the time all benefit payments under the Plan(s) have been
made. All assets in the Trust at termination shall be returned to Company.
SECTION 13. 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 Plan participants and their 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) This Trust Agreement shall be governed by and construed in
accordance with the laws of Wisconsin and of the United States of America.
(d) If the Internal Revenue Service (the "IRS") makes a final
determination that a Plan participant or beneficiary is subject to federal
income tax with respect to the value of any amounts held in accounts under this
Trust prior to the actual distribution to such participant or beneficiary, or
the Trustee receives an opinion of counsel satisfactory to it that it is likely
that the IRS will determine that such federal income tax will be payable as
described above, then the Company shall, at the written request of a
participant or beneficiary accompanied by evidence reasonably satisfactory to
the Company, notify and direct the Trustee to make distribution of such amounts
to the participant or beneficiary as soon thereafter as practicable.
(e) For purposes of this Trust, a Change of Control shall occur if any
persons (as defined in Section 13(d)(3) of the Securities and Exchange Act of
1934) other than the menbers of the family of Xxxxxxx X. Xxxxx, Xx. and their
descendants, or trusts for their benefit, and the X. X. Xxxxx Foundation, Inc.,
collectively, directly or indirectly controls in excess of 50% of the voting
common stock of the Company.
ALTERNATIVE: [(e) Would be decided if alternative 1(f) is used.]
SECTION 14. EFFECTIVE DATE.
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The effective date of this Trust Agreement shall be the date first above
set forth.
X. X. XXXXX CO.
BY: _____________________________
ATTEST: _____________________________
______________________(TRUSTEE)
BY: _____________________________
ATTEST: _____________________________
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APPENDIX A
X. X. XXXXX CO.
DEFERRED COMPENSATION TRUST
The nonqualified deferred compensation Plans referred to on page 1 of the
above Trust are identified as follows:
1. Executive Deferred Compensation Agreements between X. X. Xxxxx Co.
and the following named executives executed as of the date indicated:
Executive Date of Agreement
--------- -----------------
2. Director Deferred Compensation Agreements between X. X. Xxxxx Co.
and the following named directors executed as of the date indicated:
Director Date of Agreement
-------- -----------------
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