EXHIBIT 4.2
TRUST UNDER XXXXX XXXXXXXX CORPORATION
CAPITAL ACCUMULATION PLAN
This Agreement is made as of the 1st day of October, 1997, by and
between Xxxxx Xxxxxxxx Corporation, a Delaware corporation (the "Company") and
Wachovia Bank, N.A. ("Trustee");
WHEREAS, Company has adopted the Xxxxx Xxxxxxxx Corporation Capital
Accumulation Plan (the "Plan").
WHEREAS, Company has incurred or expects to incur liability under the
terms of the Plan with respect to the individuals participating in the Plan;
WHEREAS, Company wishes to establish a trust (the "Trust'') and to
contribute to the Trust assets that shall be held therein, subject to the claims
of Company's creditors in the event of 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 Plan;
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
as an unfunded plan maintained primarily 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 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 Plan;
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) Company hereby deposits with Trustee in trust $____________,
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 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 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 and this Trust Agreement shall be mere
unsecured contractual
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rights of Plan participants and their beneficiaries against Company. Any assets
held by the Trust will be subject to the claims of Company's general creditors
under federal and state law in the event of Insolvency, as defined in Section
3(a).
(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) Property deposited pursuant to subsection (e) may consist of
shares of Company Common Stock, par value $1.00 ("Shares"). If any Shares are
contributed to the Trust, Company shall, by virtue of such contribution,
represent that such Shares are validly issued, fully paid, nonassessable and
transferrable, subject to the requirements of applicable federal and state
securities laws. Company shall further represent that such Shares have been
registered on a Form S-8 (or another appropriate registration form) filed with
the Securities and Exchange Commission or such contribution to the Trust is
otherwise exempt from registration under the Securities Act of 1933, as amended.
Company shall advise Trustee of any limitations on the resale of such Shares.
Company shall also use its reasonable efforts to register or qualify resales of
such Shares under the applicable "blue sky" or state securities laws.
(g) Company represents that it shall restrict participation in the
Plan to directors and to a "select group of management or highly compensated
employees," as that phrase is used in and defined under Sections 201, 301, and
401 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
2. PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES.
(a) The administrator (the "Administrator") appointed for purposes of
the Plan and this Trust by the Committee (as defined in the Plan) shall deliver
to Trustee a schedule (the "Election Schedule") that indicates the deferral
elections attributable to each Plan participant (and his or her beneficiaries),
and that further provides a formula or other instructions acceptable to Trustee
for determining the amounts payable to each Plan participant, the form in which
such amounts are to be paid (as provided for or available under the Plan), and
the time of commencement for payment of such amounts. Except as otherwise
provided herein, Trustee shall make payments to Plan participants and their
beneficiaries in accordance with such Election 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 and shall pay amounts withheld to the
appropriate taxing authorities or determine that such amounts have been
reported, withheld and paid by Company. Trustee may delegate to Company the
responsibility for the reporting and withholding as described above.
(b) The entitlement of a Plan participant or his or her beneficiaries
to benefits under the Plan shall be determined by Company or such party as it
shall designate under the Plan, and any claim for such benefits shall be
considered and reviewed under the procedures set out in the Plan.
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(c) Unless otherwise provided in this subsection, all payments from
the Trust shall be in cash except that Trustee may, at the direction of the
Administrator, distribute assets held in the Trust other than in the form of
Shares (except as provided below) to Plan participants or their beneficiaries;
provided that in the event of a distribution in kind, the Administrator shall
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advise Trustee of the value of the assets distributed and Trustee may
conclusively rely upon such information without further inquiry. The foregoing
notwithstanding, no such in-kind distribution shall be authorized if and to the
extent that such authorization would cause any right of payment to the Plan
participants or their beneficiaries from Company to be deemed a "derivative
security" within the meaning of Rule 16a-1(c)(3) (including paragraph (i)
thereunder) under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"). Shares contributed to fund a stock-denominated obligation or
award may be distributed to a Plan participant or his or her beneficiaries
pursuant to the Election Schedules unless such Plan participant is or has been
subject to Section 16 of the Exchange Act, in which case no payments from the
Trust shall be in Shares until such time as the Plan participant has not been
subject to a transaction which would create a "short swing transaction" as
defined under Section 16 of the Exchange Act.
(d) 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
or any Election Schedule, Company shall make the balance of each such payment as
it falls due. Trustee shall notify Company where principal and earnings are not
sufficient.
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 the Company is Insolvent. 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 l(d) 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 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.
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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
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 or otherwise.
4. Trustee shall resume the payment of benefits to Plan participants
or their beneficiaries in accordance with Section 2 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) 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 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.
4. PAYMENTS TO COMPANY.
Except as provided in Section 3, 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.
5. INVESTMENT AUTHORITY.
(a) Trustee shall have the authority, as directed by the
Administrator, to borrow funds, and to invest in government securities, common
stocks, preferred stocks, bonds, notes, commercial paper, fixed time deposits,
money market instruments, and mutual funds, including any investment offered by
the Trustee's affiliates. Trustee may invest in securities (including stock or
rights to acquire stock) or obligations issued by Company, provided, however,
that if Trustee makes any sale or other disposition of securities issued by the
Company, such sale or other disposition must be effected through an open-market
transaction. 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. The Administrator may delegate to
each Plan participant the right to express his or her preference as to the
appropriate allocation range within the authorized investments selected by the
Administrator. Trustee retains the authority to select the actual investment
allocation for each Plan participant.
(b) Notwithstanding the foregoing, assets of the Trust may be
invested in Shares only if such Shares have been deposited in the Trust pursuant
to Sections 1(a) or (f), or to the extent a Plan participant elects to allocate
all or a portion of his or her Deferral Account (as defined in the Plan) into
Shares.
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6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust, net
of expense and taxes, shall be accumulated and reinvested.
7. ACCOUNTING BY TRUSTEE.
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
Company and Trustee. Within thirty (30) days following the close of each fiscal
year and within ninety (90) days after the removal or resignation of Trustee,
Trustee shall deliver to 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) 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. Trustee further agrees that
it is a fiduciary with respect to its duties hereunder and with respect to any
assets acquired, held or disposed of in connection with this Trust.
(b) Company shall indemnify Trustee from and against any and all
claims, demands, losses, damages, expenses (including, by way of illustration
and not limitation, reasonable attorneys' fees and litigation costs), judgments
and liabilities (collectively "Losses") arising from, out of, or in connection
with the performance of Trustee's obligations in accordance with the provisions
of this Agreement, except where such Losses are determined to be due to
Trustee's proven fraud, gross negligence or willful misconduct.
(c) Trustee may consult with legal counsel (who may also be counsel
for Company generally) with respect to any of its duties or obligations
hereunder.
(d) 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) 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,
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.
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(f) 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.
9. COMPENSATION AND EXPENSES OF TRUSTEE.
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.
10. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) Trustee may resign at any time by written notice to Company,
which shall be effective sixty (60) days after Company's receipt of such notice
unless Company and Trustee agree otherwise.
(b) Trustee may be removed by Company on sixty (60) days notice or
upon shorter notice accepted by Trustee; provided, however, that such removal
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shall be subject to the prior approval of Plan participants (or their
beneficiaries) who represent, in the aggregate, greater than fifty percent of
Plan participants as of the date of Company's appointment of the successor
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 ninety (90) days after
Company's receipt of notice of such 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, by the effective date of resignation or removal
under subsections (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 successor or for instructions. All expenses of Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
11. APPOINTMENT OF SUCCESSOR.
(a) If Trustee resigns or is removed in accordance with Section 10(a)
or (b), Company may appoint any third party, such as a bank trust department or
other party that may be granted corporate trust powers under state law, as a
successor to replace Trustee upon resignation or removal; provided, however,
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that such appointment shall be subject to the prior approval of Plan
participants (or their beneficiaries) who represent, in the aggregate, greater
than fifty percent of Plan participants as of the date of Company's appointment
of the successor Trustee. Subject to the approval required by the immediately
preceding sentence, the appointment shall be effective when accepted in writing
by the successor 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.
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(b) 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. The successor Trustee shall not be responsible for and 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.
(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 or shall make the Trust
revocable.
(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. Upon termination of the Trust, Company may designate
any organization described in Section 501(c)(3) of the Code to receive any
assets remaining in the Trust.
(c) Upon written approval of Plan participants or beneficiaries
entitled to payment of benefits pursuant to the terms of the Plan, Company may
terminate this Trust prior to the time all benefit payments under the Plan have
been made.
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 the State of California applicable to agreements
entered into and to be performed entirely therein.
14. EFFECTIVE DATE.
The effective date of this Agreement shall be October 1, 1997.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be executed as of the day and year first above written.
The "COMPANY"
XXXXX XXXXXXXX CORPORATION,
a Delaware corporation
By:__________________________________
Name:
Title:
The "TRUSTEE"
WACHOVIA BANK, N.A.
By:__________________________________
Name:
Title:
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