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Exhibit 10.59
RAILAMERICA, INC. NONQUALIFIED DEFERRED COMPENSATION TRUST
This RailAmerica, Inc. Nonqualified Deferred Compensation Trust
Agreement is made this 3rd day of January, 1997 by and between RailAmerica,
Inc. (the "Company") and Xxxxxx X. Xxxxxxxx (the "Trustee");
WHEREAS, the Company has adopted the nonqualified deferred
compensation Plans as listed in Appendix One hereto and may adopt additional
nonqualified deferred compensation Plans for the benefit of eligible employees
(the "Plan");
WHEREAS, the Company has incurred or expects to incur liability under
the terms of such Plans with respect to the individuals participating in such
Plans;
WHEREAS, the Company wishes to establish a trust (hereinafter called
"Trust") and to contribute to the Trust assets that shall be held therein,
subject to the claims of the Company's creditors in the event of the Company's
Insolvency, as herein defined, until paid to Plan participants and their
beneficiaries in such manner and at such times as specified in the Plans;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of the Plans
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;
WHEREAS, it is the intention of the Company to make contributions to
the Trust to provide itself with a source of funds to assist it in the meeting
of its liabilities under the Plans;
NOW, THEREFORE, the parties do hereby establish the Trust and agree
that the Trust shall be comprised, held and disposed of as follows:
1. ESTABLISHMENT OF TRUST.
(a) The Company hereby deposits with the Trustee in trust the
amount shown on Appendix Two hereto, which shall become the
principal of the Trust to be held, administered and disposed
of by the Trustee as provided in this Trust Agreement.
(b) The Trust hereby established is irrevocable.
(c) The Trust is intended to be a grantor trust, of which 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.
(d) The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of the 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 Plans
and this Trust 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(a) herein.
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(e) The 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 the Trustee to augment the principal to
be held, administered and disposed of by the Trustee as
provided in this Trust Agreement. Neither the Trustee nor any
Plan participant or beneficiary shall have any right to compel
such additional deposits.
2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) The Company shall deliver to the 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 the Trustee for determining the amounts so
payable, the form in which such amount is to be paid (as
provided for or available under the Plans), and the time of
commencement for payment of such amounts. Except as otherwise
provided herein, the Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such
Payment Schedule. The 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 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.
(b) 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.
(c) The Company may make payment of 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 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 Plans, the
Company shall make the balance of each such payment as it
falls due. The Trustee shall notify the Company where
principal and earnings are not sufficient.
3. TRUSTEE RESPONSIBILITY REGARDING PAYMENTS
TO TRUST BENEFICIARY WHEN COMPANY IS INSOLVENT.
(a) The Trustee shall cease payment of benefits to Plan
participants and their beneficiaries if the Company is
Insolvent. The Company shall be considered "Insolvent" for
purposes of this Trust 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.
(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 the Company
under federal and state law as set forth below.
(1) The Board of Directors and the Chief
Executive Officer of the Company shall have the duty to inform the Trustee in
writing of the Company's Insolvency. If a person claiming to be a creditor
of the Company alleges in writing to the Trustee that the Company has become
Insolvent, the Trustee shall determine whether the Company is Insolvent
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and, pending such determination, the Trustee shall discontinue payment of
benefits to Plan participants or their beneficiaries.
(2) Unless 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) 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.
(4) The Trustee shall resume the payment of
benefits to Plan participants or their beneficiaries in accordance with Section
2 of this Trust Agreement only after the Trustee has determined that the
Company is not Insolvent (or is no longer Insolvent).
(a) Provided that there are sufficient assets, if the 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 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 hereunder during any such period of discontinuance.
4. PAYMENTS TO COMPANY.
Except as provided in Section 3 hereof, 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
payment of benefits have been made to Plan participants and their beneficiaries
pursuant to the terms of the Plans.
5. INVESTMENT AUTHORITY.
(a) The Trust Fund shall be held in trust by the Trustee and shall
be invested and reinvested as provided in this Section 5, without distinction
between principal and income and without regard to the restrictions of
the laws of the State of Florida, or any other jurisdiction, relating to the
investment of Trust Funds. The Trustee shall invest and reinvest the Trust Fund
in its discretion, except as otherwise directed by the Company, or in accordance
with Section 5(d) in accordance with the directions of an Investment Manager.
The Trustee shall be under no duty or obligation to review any investment to be
acquired, held or disposed of pursuant to such directions nor to make any
recommendation with respect to the disposition or continued retention of any
such investment.
(b) In addition to the more general investment powers provided
below, the Trustee may invest in securities (including stock or rights to
acquire stock) or obligations issued
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by the Company. 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. The Company shall
have the right at anytime, and from time to time in its sole discretion, to
substitute assets of equal fair market value for any asset held by the Trust.
This right is exercisable by the Company in a nonfiduciary capacity without the
approval or consent of any person in a fiduciary capacity.
(c) The Company shall establish specific investment policies and
guidelines for Trust Funds. The Trustee shall be responsible only for investing
the Trust Fund in accordance with such policies and guidelines. If any
change in such policies or guidelines is subsequently deemed appropriate,
notice of such change shall be promptly communicated by the Company to the
Trustee, but the Trustee shall be under no duty to take or refrain from taking
any action based on such changes prior to receiving such notice.
(d) The Company may appoint one or more than one Investment
Manager to direct the investment of the Trust Fund. Upon the effective date of
such appointment, such Investment Manager shall have the sole power,
without prior consultation with the Trustee, to manage and direct the
acquisition and disposition of the Trust Fund. The Investment Manager shall
keep such records and make such reports to the Trustee as may be specified in
the agreement appointing such Investment Manager. The Company at its discretion
also may terminate the appointment of any Investment Manager. The Company shall
notify the Trustee of such termination and, in the absence of specific
directions from the Company or the appointment of a successor Investment Manager
for the Investment Account, the Company shall be responsible for the management
and control of the assets formerly managed by the Investment Manager.
(e) To the extent neither the Company nor an Investment Manager
furnishes directions as to the investment of the Trust Fund, the Trustee may
retain uninvested cash or cash balances, without being required to pay
interest thereon, or may invest such assets in short-term investments and one of
the commingled funds described in Section 5(f)(8).
(f) The Trustee shall have the power to do all things and execute
such instruments as it may deem necessary or proper to carry out its
responsibilities under this Trust Agreement, including the following powers:
(1) To invest any and all monies in stock of the
Company, other stocks, bonds, securities, insurance policies insuring the
lives of employees covered by any Plan, mutual funds, investment company or
trust shares, mortgages, notes, choses in action, real estate, improvements
thereon, and other property acceptable to the Trustee;
(2) To sell, exchange, or otherwise dispose of
any property at any time held or acquired by the Trust Fund, at public or
private sale, for cash or on terms, without advertisement, including the right
to lease for any term;
(3) To vote in person or by proxy any corporate
stock or other security and to agree to or take, or refrain from taking, any
other action necessary or appropriate for a shareholder or owner in regard to
any reorganization, merger, consolidation, liquidation, bankruptcy or other
procedure or proceeding affecting any stock, bond, note or other property;
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(4) To compromise, settle, adjust or otherwise
act in any reasonable manner whatsoever on any claim or demand by or against
the Trust Fund and to agree to any rescission or modification of any contract
or agreement affecting the Trust Fund;
(5) To deposit any stock, bond or other security
in any depository or other similar institution and to register any stock, bond
or other security in the name of any nominee, ithout the addition of words
indicating that such security is held in a fiduciary capacity, but accurate
records shall be maintained showing that such security is a Trust Fund asset
and the Trustee shall be responsible for the acts of such depository or
nominee;
(6) To hold cash (including, without limitation,
in non-interest bearing accounts) in such amounts and for such time as may be
in its opinion reasonable for the proper management of the Trust Fund;
(7) To grant, sell, purchase, or exercise any
option of any kind or description whatsoever to purchase or sell any security
or other property which is a permissible investment under this Section 5,
provided the Trustee in no event shall grant or sell any option under which any
person can require the Trust Fund to sell any security or other property
which the Trust Fund at the time of such grant or sale does not hold in an
amount sufficient to cover such option and any other outstanding option granted
or sold by the Trustee, and the Trustee in no event shall dispose of any
security or other property covering any option until such option is exercised
or otherwise expires;
(8) To invest all, or any part, of the assets of
the Trust Fund in any common, collective or group trust fund which is
maintained under section 584 of the Code or Revenue Ruling 81-100, 1981-1 C.B.
326, by the Trustee or any bank which is a member of an "affiliated group" (as
that term is defined in section 1504 of the Code) with the Trustee, the
provisions of which common, collective or group trust fund upon such investment
shall automatically be adopted and made a part of this Trust Agreement for the
period such investment is made in such common, collective or group trust fund;
(9) To make such other investments without regard
to any law now or hereafter in force limiting the investments of trustees
or other fiduciaries.
(g) With respect to any policy of life insurance
that the Trustee owns or under which the death benefits are made payable
to the Trustee, the Trustee shall have the following specific powers and
responsibilities:
(1) If the Trustee is the owner of any such
policy, the Trustee reserves all available benefits, privileges, payments,
dividends, surrender values, options, conversion rights and elections,
including the right at any time or times to change the beneficiary, to borrow
or otherwise receive the surrender value, to pledge or assign the policy or its
proceeds as collateral security for any loan which the owner or owners may
obtain from any lender, including a Trustee under this agreement individually
or a parent or affiliate company, and to withdraw the policy if deposited with
the trustees, without any duty on the trustees to see its return.
(2) Upon the death of the insured under the
policy the Trustee shall take such action as they deem best to collect the
policy proceeds, paying the expenses of collection from the Trust Fund,
but the Trustee need not enter into or maintain any litigation to
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enforce payment on the policy until indemnified to their satisfaction against
all expenses and liabilities to which it might by any such litigation be
subjected. The Trustee may release the insurance company from its liability
under the policy and make any compromise which the trustees deem proper.
(3) The insurance company shall not take notice
of the provisions of this Agreement or see to the application of the policy
proceeds, and the Trustee's receipt to the insurance company shall be a
complete release for any payment made and shall bind every participant or
beneficiary under this Agreement.
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.
7. ACCOUNTING BY TRUSTEE.
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 the
Company and the Trustee. Within 90 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.
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 like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims, provided, however, that the
Trustee shall incur no 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.
(b) 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.
(c) 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 hereunder.
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(d) 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 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, or to loan
to any person the proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee pursuant to
this Trust 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 the Trustee's
fees and expenses. If not so paid, the fees and expenses shall be paid from
the Trust.
10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) The Trustee may resign at any time by written notice
to the Company, which shall be effective 45 days after receipt of such notice
unless the Company and the Trustee agree otherwise.
(b) The Trustee may be removed by the Company on 30 days
notice or upon shorter notice accepted by the Trustee.
(c) Upon a Change of Control, as defined herein, the
Trustee may not be removed by the Company for 5 years.
(d) If the Trustee resigns or is removed within 5 years of
a Change of Control, as defined herein, the Trustee shall select asuccessor
Trustee in accordance with the provisions of Section 11(b) hereof prior to the
effective date of the Trustee's resignation or removal.
(e) 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.
(f) 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 under paragraphs (a) and (b) 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.
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11. APPOINTMENT OF SUCCESSOR.
(a) If the Trustee resigns or is removed in accordance with Section
10(a) or (b) hereof, the Company may appoint any third party, such as a bank
trust department or other party 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.
(b) If the Trustee resigns or is removed pursuant to the provisions
of Section 10(d) hereof and selects a successor Trustee, the Trustee may
appoint any third party such as a bank trust department or other party 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.
12. AMENDMENT AND TERMINATION.
(a) The Trust is irrevocable but this Agreement may be amended with
the written consent of the Trustee and all beneficiaries. No amendment will be
permitted that would vest the assets of the Trust in, or at the direction
of, the Company except as required pursuant to Section 1(d) 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 Plans. Upon termination of the Trust, any
assets remaining in the Trust shall be returned to the Company.
13. MISCELLANEOUS.
(a) Any provisions 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 the State of Florida.
(d) For purposes of this Trust, Change of Control shall mean the
purchase or other acquisition by any person, entity or group of persons,
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
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voting power of the Company's then outstanding voting securities entitled to
vote generally, or the 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 the 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 the
Company's then outstanding securities, or a liquidation or dissolution of the
Company or of the sale of all or substantially all of the Company's assets.
14. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be
January 3, 1997.
The Company and the Trustee have executed this Trust Agreement
effective as provided herein.
RAILAMERICA, INC.
By:/s/ Xxxxxx Xxxxxxxx
-----------------------------
TITLE: EXECUTIVE VICE PRESIDENT
ATTEST:
(CORPORATE SEAL)
By:/s/ Xxxxx X. Xxxx
------------------------
Ass't. Secretary
TRUSTEE:
/s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxx
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APPENDIX ONE
TO
RAILAMERICA, INC. NONQUALIFIED DEFERRED COMPENSATION TRUST
Plans Currently in Place Reflecting Agreements with the Following Employees:
1. Nonqualified Deferred Compensation Agreement with Xxxx X. Xxxxxx.
2. Nonqualified Deferred Compensation Agreement with Xxxx Xxxxxx.
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APPENDIX TWO
TO
RAILAMERICA, INC. NONQUALIFIED DEFERRED COMPENSATION TRUST
The amount of the initial deposit to the RailAmerica, Inc.
Nonqualified Deferred Compensation Trust is ___________________________
Dollars ($____________).
