Rabbi Trust Agreement

Transcription

1 Rabbi Trust Agreement th Street, Suite 1700 Denver, CO Please direct mail to: Toll Free: PO Box Fax: Denver, CO THIS TRUST AGREEMENT is made this day of, 20, by and between (the Company ), and TD AMERITRADE TRUST COMPANY, a trust company (the Trustee ). INTRODUCTION This Trust Agreement creates a Trust to receive contributions and to hold and invest assets purchased or received in connection with a non-qualified deferred compensation plan (the Plan ) sponsored by the Company for the benefit of certain employees designated by the Company. The Trust assets shall be subject to the claims of Company s creditors in the event of the Company s Insolvency, as herein defined, until paid to the Plan s Participants and/or their beneficiaries pursuant to the terms of the Plan. The parties intend that this Trust constitute an unfunded arrangement which shall not affect the status of the Plan as an unfunded plan 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, as amended ( ERISA ). 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 and shall be construed accordingly. 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 the Plan Participants and the Company s general creditors. 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 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 the Company s Insolvency. NOW, THEREFORE, the Trust is hereby created for the uses and purposes and upon the conditions hereinafter stated, and the Trust assets shall be held and disposed of in accordance with the following terms and provisions: ARTICLE 1: DEFINITIONS 1.1 Bankruptcy Code means Title 11 of the United States Code, as amended. 1.2 Change of Control means: (1) a majority of the members of the Company s Board of Directors being replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company s Board of Directors prior to the date of the appointment or election; or (2) a change in ownership of a substantial portion of the Company s assets Prop. Reg. Section 1.409A-3(g)(5)(viii)(A). 1.3 Code means the Internal Revenue Code of 1986, as amended. 1.4 Insolvency or Insolvent means the inability to pay debts as they come due, or being subject to a pending proceeding as a debtor under the Bankruptcy Code. 1.5 Participant means an employee of the Company participating in the Plan. 1.6 Plan means the Plan. 1.7 Trust Estate means all assets from time to time held by the Trustee under this Agreement. ARTICLE 2: EMPLOYER CONTRIBUTIONS 2.1 Contributions. The Company shall contribute to the Trust such money or other assets in the amounts and at the times determined by the Company in its sole discretion. The Trustee shall have no obligation or right to request that additional contributions be made to the Trust Estate. 2.2 Change of Control. Upon a Change of Control, Company shall, as soon as possible, but in no event longer than days following the Change in Control, make an irrevocable contribution to the Trust in an amount that is sufficient to pay each Plan participant or beneficiary the benefits to which such Participants or their beneficiaries would be entitled pursuant to the terms of the Plan as of the date on which the Change of Control occurred. ARTICLE 3: DISTRIBUTION OF TRUST ESTATE 3.1 General. At the direction of the Company, the Trustee shall receive and manage the principal and income of the Trust Estate and, after paying the proper fees and expenses of the Trust (as described in Section 6.3), shall distribute the Trust Estate in accordance with this Article Benefit Payments. Within 30 days after receiving written direction from the Company that a Participant (or a Participant s beneficiary) is entitled to benefits under the Plan, the Trustee shall liquidate the assets identified by the Company. The Trustee shall then, within five business days after receiving the liquidation proceeds, send such proceeds by regular mail to the Company. The Company shall then pay such amounts, net of applicable taxes, to the Participant or the Participant s beneficiary as applicable. 3.3 Obligation Offset. The Company s payment of proceeds received from the Trustee to a Participant (or beneficiary) shall be in satisfaction of the Company s obligation to pay Page 1 of 5 TDTC 4277 Rev. 07/08

2 such benefits. However, the Company shall remain liable for benefit payments for which the Trust Estate is insufficient. 3.4 Tax Withholding. The Trustee shall not withhold income taxes or employment taxes from any payment under Section 3.2. The Company shall be responsible for any income tax withholding or employment taxes on amounts paid to Participants or their beneficiaries. 3.5 Remaining Assets. If, following the payment of all benefits to all Participants and beneficiaries under the Plan (including all direct payments to the Company of benefit proceeds under Section 3.2), there remain assets in the Trust Estate, upon written direction of the Company the Trustee shall distribute such assets to the Company and the Trust shall terminate. ARTICLE 4: INSOLVENCY 4.1 Insolvency Notification. The Board of Directors and the Chief Executive Officer of the Company shall each have the duty to inform the Trustee, or to cause the Trustee to be informed, in writing of the Company s Insolvency. 4.2 No Benefit Distributions. Upon receipt of the written notice described in Section 4.1 or upon gaining actual knowledge of the Company s Insolvency, the Trustee shall suspend all payments under Article 3, shall hold the assets for the benefit of the Company s general creditors, and shall distribute the Trust Estate only as directed by a court of competent jurisdiction. If the Trustee subsequently receives written notice from the Board of Directors or Chief Executive Office that the Company is no longer Insolvent, the Trustee shall recommence payments under Article 3. Nothing in this Agreement shall in any way diminish any rights of Participants or their beneficiaries to pursue their rights as general creditors of the Company with respect to benefits due under the Plan or otherwise. 4.3 Trustee s Duties. Unless the Trustee has actual knowledge of the Company s Insolvency, or has received notice from 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. ARTICLE 5: INFORMATION/REPORTING The Company shall provide the Trustee, upon written request, with such information as the Trustee reasonably requires to administer the Trust, including, but not limited to, an annual comprehensive list of all Participants and their benefits under the Plan. ARTICLE 6: ADMINISTRATION OF THE TRUST Notwithstanding any of the provisions of the Trust other than Article 4, the Trustee shall rely on the direction of the Company with respect to all aspects of the management and administration of the Trust. All actions of the Trustee will be taken only upon the direction of the Company or its duly authorized agents (the Agents ). The Trustee will not render investment advice with respect to any moneys or other property of such Trust and does not have authority or responsibility to do so. The Trustee has no authority or responsibility to exercise its independent judgment in the administration of the Trust and may rely on the directions given it by the Company or the Agents without any liability therefore to any person. 6.1 Service Agreement. All of the duties, responsibilities and services of the Trustee under the Trust are described in the Service Agreement, which is incorporated herein by reference and is attached as Exhibit 1 to this Trust Agreement. Except for any duties or responsibilities specifically described in this Trust Agreement and the Service Agreement, the Trustee has no other duties or responsibilities to the Company, the beneficiaries or any other person with respect to the Trust. 6.2 Powers of the Trustee. In addition to the powers conferred upon the Trustee either expressly by, or by necessary implication of, the other provisions of this Trust Agreement, the Trustee shall have all other powers, not inconsistent with law or equity, as may be necessary and proper to attain the objectives of this Trust Agreement. By way of illustration, and not by way of limitation, the Trustee shall, at the direction of the Company, have power: To invest and reinvest in, or exchange assets for, any securities, insurance policies or other properties as directed by the Company. However, the Company shall not have the authority to direct the Trustee to acquire any assets located outside the United States and the Trustee shall not have the power to transfer or distribute any assets outside the United States To have and possess any or all of the rights of an owner with respect to any life insurance policy held in the Trust Estate, including, without limiting the generality of the foregoing, the rights to receive or apply dividends or distributive shares of surplus, disability benefits, surrender values or proceeds of matured endowments; to obtain and receive from the issuing insurance company such advances or loans on account of any such policy as may be available; provided, however, the Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinguished from converting the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against the policy To sell or exchange any property at any time held by it, and any sale may be made by a private contract or by public auction, and for cash or upon credit, or partly for cash and partly upon credit and no person dealing with the Trustee shall be bound to see to the application of the purchase money or to inquire into the validity, expediency or propriety of any such sale or other disposition To compromise, compound, arbitrate or otherwise adjust and settle any debt or obligation due to or from it as Trustee hereunder and to reduce the rate of interest on, to extend or otherwise modify, or to foreclose upon default or otherwise enforce any such obligation To execute any investment directions from the Company with respect to investment fund elections under any variable annuities, mutual funds or life insurance contracts held in the Trust Estate. 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3 6.2.6 To make, execute, acknowledge and deliver any and all deeds, leases, assignments and any other instruments To cause any investments from time to time held by it to be registered in, or transferred into, its name as Trustee or the name of its nominee or nominees or to retain them unregistered or in form permitting transferability by delivery, but the books and records of the Trustee shall at all times show that all such investments are part of the Trust Estate To accept and retain for such time as it may deem advisable any securities or other property received or acquired by it as Trustee hereunder, whether or not such securities or other property would normally be purchased as investments hereunder To do all acts whether or not expressly authorized herein which it may deem necessary or proper for the protection of the property held hereunder and to carry out the purposes of the Plan. 6.3 Trustee Fees and Expenses Trustee s Fees. A Trustee at any time serving hereunder shall be entitled to receive a reasonable fee as compensation for services rendered to or on behalf of the Trust. The Company shall pay such fees directly to the Trustee Other Expenses. The Company shall pay all reasonable fees and expenses incurred by the Trustee in the administration of the Trust, including but not limited to fees and expenses for agents, advisors, and attorneys hired by the Trustee to fulfill its obligations under this Agreement Unpaid Fees/Expenses. The Trustee may recover from the Trust Estate any fees and expenses described in Section and that are not paid by the Company within 90 days after the Company receives notice of such fees and expenses. 6.4 Investment of Trust Estate. The Trust Estate shall be invested as directed by the Company, as described in Section Unless otherwise directed by a court following the Company s Insolvency, the Trustee shall continue to invest the Trust Estate as directed by the Company notwithstanding the Company s Insolvency, unless otherwise directed pursuant to a court order. The Trustee shall not be liable if such directions result in a breach of any duty of the Trustee to diversify, to maintain liquidity or to meet any other investment standard. 6.5 Trustee s Protection The Trustee shall not be liable for any action taken or omitted, or for any loss or depreciation of value of any property in the Trust Estate, whether due to an error of judgment or otherwise, where the Trustee has acted with all the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims Except as otherwise required in the Trust Agreement, the Trustee shall have no duty or obligation to determine whether the Company s Insolvency or any other event has occurred The Trustee shall be entitled to rely on any information furnished to it by the Company or any other party appointed by the Company to provide information to the Trustee The Trustee does not warrant and shall not be liable for any tax consequences associated with participation in the Plan. By way of example and not limitation, Trustee shall not be responsible or liable for the Plan s failure to comply with the requirements of Code Section 409A The Trustee may rely on the advice of legal counsel, including counsel for the Company, in interpreting the provisions of this Trust Agreement The Trustee shall not be liable for the failure or omission of any insurance company for any reason to pay any benefits or furnish any services under the policies or contracts The Trustee shall not be liable for the inadequacy of the Trust Estate to pay all amounts due under the Plan. 6.6 Trustee Indemnification. The Company will indemnify and hold the Trustee and its shareholders and subsidiaries, and each of their respective officers, directors, agents and employees harmless from and against, and will waive any and all claims (including but not limited to damages, court costs, reasonable legal fees and expenses, and costs of investigation) resulting or arising from any of the following: (i) changes in the market value of any asset; (ii) reliance or action taken in reliance upon any notice, instruction, direction, or approval received (whether in writing or otherwise) from the Company or its duly authorized Agents; (iii) any exercise or failure to exercise investment discretion by any person; (iv) the Trustee s refusal to act on any unclear or ambiguous direction or, on advice of Trustee s counsel, any direction the Trustee determines to be in contravention of this Trust or any applicable law; or (v) any act or failure to act by the Company or its duly authorized agents resulting from the Trustee transmitting or not transmitting to the Company, its duly authorized agents or any other person any information of any kind and from wherever derived concerning any investment in the Trust (including without limitation proxy and information statements, prospectuses, tender offers, and other notices to shareholders or owners). 6.7 Bond. No Trustee serving hereunder shall be required to give any bond or other security for the faithful performance of its duties. 6.8 Protection of Purchaser. No purchaser of any property sold by the Trustee shall be bound to inquire into the necessity or propriety of any such sale or see to the application of the purchase money arising therefrom, and the written receipt of the Trustee for the purchase money of any property sold, or for any money or securities or property which may be paid or transferred to the Trustee, shall effectively discharge the purchaser or other persons buying or transferring the same. Any person dealing with the Trustee shall be absolutely Page 3 of 5 TDTC 4277 Rev. 07/08

4 protected in relying upon the certificate of such Trustee as to the extent of its authority by reason of any delegation of discretion or otherwise, and no person shall be required to ascertain whether or not the Trustee has the power to exercise the rights, powers and duties herein conferred. ARTICLE 7: RECORDS OF THE TRUSTEE 7.1 Records Required. Except to the extent specifically provided otherwise in this Trust Agreement, the Trustee or its designee shall have sole custody of the assets constituting the Trust Estate. The Trustee shall keep true and accurate records of all transactions of the Trustee. 7.2 Quarterly Accounting. The Trustee shall render a quarterly written account of the administration of the Trust to the Company. The approval of the Trustee s account by the Company shall be binding and conclusive as to all persons, living or unborn, who are or may become entitled to share in the income or principal of the trust, and the Trustee need not account to any other person or court. If no objection is made to a written account of the Trustee within 90 days after it is rendered, approval of the account shall be deemed to have been given. In the event of the resignation or discharge of a Trustee, the procedures outlined in this Article shall apply with respect to the rendition by such Trustee of its account, and the approval thereof, for the accounting period ending with the date of resignation or discharge. Notwithstanding any provisions hereof, the Trustee shall have the right to apply to a court of competent jurisdiction for the judicial settlement of any such accounts and in any such action or proceeding it shall be necessary to join as parties thereto only the Trustee and the Company. Any judgment or decree which may be entered in any such action or proceeding shall be conclusive and binding upon all parties having or claiming to have any interest in the Trust Estate. ARTICLE 8: SUCCESSOR TRUSTEES 8.1 Removal. The Company may remove any Trustee at any time upon 60 days advance notice to the Trustee. To effect such removal, the Company shall execute an instrument in writing stating that pursuant to the provisions of this Article such removal is made. Thereafter, upon delivery of the said instrument to the Trustee, the instrument shall be effective and the removed Trustee shall cease to serve upon the appointment of a successor Trustee. 8.2 Resignation. Any Trustee may resign at any time upon 60 days advance notice to the Company. To effect such resignation, the Trustee shall execute an instrument in writing stating that pursuant to the provisions of this Article such resignation is made. Thereafter, upon delivery of the said instrument to the Company, the instrument shall be effective and the resigning Trustee shall cease to serve upon the appointment of a successor Trustee. 8.3 Appointment of Successor Trustee. Upon the removal or resignation of any Trustee, the Company shall, by instrument in writing, designate a successor Trustee to act hereunder, which successor shall have the same powers and duties as those conferred hereby, or by necessary implication hereof, upon the original Trustee. Upon such designation, the Trustee thus removed or resigning shall surrender, assign and transfer to such successor Trustee all records, books, documents, moneys, insurance policies, contracts and other property then constituting the Trust Estate, and other assets held by the Trustee thus removed or resigning for, or incident to, the fulfillment of the Trust created by this Agreement and the administration of the Trust Estate, provided that the Trustee thus removed or resigning may reserve such reasonable sum or sums as may be deemed advisable for payment of proper charges against the Trust Estate, including, by way of example and not of limitation of the foregoing, expenses in connection with such resignation or removal. Any balance of such reserve which may remain after the payment of all such charges shall be paid over to the successor Trustee within a reasonable time. The appointment of any successor Trustee hereunder shall be effective, without the necessity of judicial action, upon the execution and filing with the Company of a written instrument by which such successor Trustee shall accept the Trust created by this Trust Agreement. Without further action, the successor Trustee shall then become vested with all the estate, rights, powers, discretion and duties of the predecessor Trustee. If the Company should fail to appoint a successor Trustee, or if such successor Trustee should fail to accept such appointment, the removed or resigning Trustee may petition a court of competent jurisdiction for the appointment of a successor Trustee and, pending such appointment, may deliver the assets of the Trust Estate to such court with such court s consent. 8.4 Merger of Trustee. If the Trustee at any time is merged, or consolidated with, or sells or transfers any or all of its assets or any business unit relating to accounts for which it is Trustee, to another corporation, whether state or federal, or is reorganized or reincorporated in any manner, then the resulting or acquiring corporation will be substituted for such corporate Trustee without any action upon the part of the Company or any other person having or claiming to have an interest in the Trust Estate or under the Plan. ARTICLE 9: REVOCABILITY/AMENDMENT OF TRUST The Trust created hereunder shall be revocable and may be amended at any time with respect to a specific Participant by written agreement signed by the Company, the Participant and the Trustee. The Trust shall become irrevocable upon a Change of Control. The Company may amend or modify the Trust (by a writing delivered to the Trustee) as necessary (i) to comply with any law or requirements of a regulatory agency, surety or insurance company, or (ii) to meet any reasonable requirements of the Trustee or any successor Trustee, so long as such amendments do not contravene any requirement of law, and except that: 9.1 Trustee s Duties. The duties or obligations of the Trustee shall not be increased without its written consent; 9.2 Participant Protection. The rights of a Participant to payments from the Trust with respect to amounts contributed to the Trust prior to any such amendment shall not be affected by the amendment unless the Participant consents in writing to such amendment; and 9.3 Adverse Effects. No amendment may be made to the Trust if it would cause the Plan to be funded for income tax or ERISA purposes or if it would cause any amounts contributed to the Page 4 of 5 TDTC 4277 Rev. 07/08

5 Trust to be taxable to the Participants or their beneficiaries prior to the actual receipt of such amounts. Therefore, no such amendment shall be made if the amendment would cause the Plan to be funded or the Participants or their beneficiaries to be subject to income tax on deferred compensation prior to actually receiving such amounts. ARTICLE 10: TERMINATION OF TRUST The parties hereto contemplate that the Trust created under this Trust Agreement will continue until all benefits are paid pursuant to the Plan or until the Plan is terminated by the Company. ARTICLE 11: MISCELLANEOUS 11.1 Rights in the Trust. No Participant or any other person shall have any right or claim to the Trust Estate, including any life insurance policy on the Participant s life that may be held by the Trustee, except as specified in this Trust Agreement Claims and Disputes. Any claim or dispute as to whether a Plan Participant (or his or her beneficiary) is entitled to benefits under a Plan shall be resolved under the claims and review procedures of the Plan (the Plan Claims Procedures ). However, whether a Participant (or his or her beneficiary) is entitled to a distribution from the Trust to satisfy rights to benefits that are determined under the Plan Claims Procedures to be payable, and all other claims and disputes of every type and matter that arise between or among the Company, the Participants, the beneficiaries and/or the Trustee shall be submitted to binding arbitration pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The arbitration shall take place in Colorado. To the extent not preempted by federal law, Colorado statutory law (including without limitation the statutes governing the award of damages in arbitration) and Colorado common law shall control during arbitration. The Company and the beneficiaries shall have no other right to institute or conduct litigation or arbitration involving the Trustee in any other forum or location, or before any other body, whether individually, representatively or in any other capacity. Arbitration is final and binding on the parties. An award rendered by the arbitrator(s) may be entered in any court having jurisdiction over the parties. The arbitrator s award is not required to include factual findings or legal reasoning, and any party s right to appeal or to seek modification or rulings by the arbitrator(s) is strictly limited Rights to Benefits. The rights of a Participant to benefits under the Plan shall be determined solely under the provisions of such Plan and not under the provisions of this Trust Agreement. addressed to the Trustee at its last known address and deposited, postage paid, in the United States mail Situs of Trust and Governing Law. This Trust is accepted by the Trustee in Colorado and all questions pertaining to its validity, construction and administration shall be determined in accordance with the laws of such state even though the Company, a Participant or beneficiary of a Participant, or any parties having or claiming to have a right to benefits under the Trust Agreement may reside or conduct business elsewhere. In addition, the provisions of the Agreement shall be construed, and the Trust shall be administered, to satisfy the Company s intention that the Trust neither cause the Plan to be a funded plan for ERISA purposes, nor cause the Participants or their beneficiaries to be subject to income tax on compensation deferred under such Plan prior to actually receiving such compensation Gender and Form. Wherever any words are used in this Agreement in the masculine gender, they should be construed as though they were also used in the feminine or neuter genders in all situations where they would so apply, and wherever any words are used in this Agreement in the singular form, they shall be construed as though they were also used in the plural form in all situations where they would so apply Invalid Provisions. If any provisions of this Agreement or rules and regulations made pursuant hereto are held to be illegal or invalid for any reason, such illegality shall not affect the remaining portions of this Trust Agreement or the rules and regulations unless such illegality or invalidity prevents accomplishment of the objectives and purposes of this Trust Agreement Captions. The captions at the head of the sections of this Agreement are designed for convenience of reference only and are not to be used for the purposes of interpreting any provision of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers on the day and year first written above. COMPANY By: X Title: 11.4 No Right to Alienation. The Trust Estate shall not be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge by any Participant or the Company, and any attempt to make it so subject shall be void and of no effect Successors of the Company. The rights, obligations and status of the Company under this Agreement shall inure to the benefit of any successor to the Company resulting from a merger, acquisition, affiliation, or other corporate restructuring Notices. All notices, requests, contributions and other information required hereunder shall be mailed or delivered to the Trustee, and shall be sufficient if TRUSTEE By: X Title: TD AMERITRADE Trust Company TD AMERITRADE Trust Company is a non-depository trust company, acts as a custodian and/or directed trustee and is not a member of FINRA/SIPC. TD AMERITRADE Trust Company is a subsidiary of TD AMERITRADE Holding Corporation. TD AMERITRADE is a trademark jointly owned by TD AMERITRADE IP Company, Inc. and The Toronto-Dominion Bank TD AMERITRADE IP Company, Inc. All rights reserved. Used with permission. Page 5 of 5 TDTC 4277 Rev. 07/08

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