Exhibit 10.23
ALBERTSON'S, INC.
2000 DEFERRED COMPENSATION TRUST
ALBERTSON'S, INC.
2000 DEFERRED COMPENSATION TRUST
TABLE OF CONTENTS
PREAMBLE 1
ARTICLE I: DEFINITIONS 1
ARTICLE II: NAME AND ESTABLISHMENT OF TRUST 7
Section 2.01 Name and Purpose 7
Section 2.02 Appointment of Trustee; Acceptance 7
Section 2.03 Appointment of Recordkeeper; Acceptance 8
Section 2.04 Grantor Trust 8
ARTICLE III: PROVISIONS RELATING TO THE EMPLOYER 8
Section 3.01 Contributions 8
Section 3.02 Insurance Policies 8
Section 3.03 Letters of Credit 9
Section 3.04 Return of Employer Contributions 9
Section 3.05 Certain Employer Notices 10
Section 3.06 Action by Employer 10
Section 3.07 Employer Liability 10
ARTICLE IV: PROVISIONS RELATING TO TRUSTEE AND RECORDKEEPER 10
Section 4.01 Receiving Contributions 10
Section 4.02 Management and Control of Trust Assets 10
Section 4.03 Investment of Trust Assets 11
Section 4.04 Distribution of Trust Assets; Limitations 12
Section 4.05 Protection of Trustee 14
Section 4.06 Creditors of Employer 14
Section 4.07 Compensation and Expenses 15
Section 4.08 Limitation of Administrative Duties 15
Section 4.09 Accountings 15
Section 4.10 General Management Powers 16
Section 4.11 Insurance Policies 18
Section 4.12 Liability for Breach of Fiduciary Duty 20
Section 4.13 Consultation and Indemnification 20
Section 4.14 Resignation and Removal 21
Section 4.15 Duties of the Recordkeeper 24
Section 4.16 Determinations by the Trustee; Notices 24
Section 4.17 Rights of Trustee 24
Section 4.18 Priority of Distribution and Liquidation of Trust Assets 25
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ARTICLE V: GENERAL ADMINISTRATIVE PROVISIONS 26
Section 5.01 Exchange of Information by the Employer and the Trustee 26
Section 5.02 Information to the Recordkeeper and Trustee 26
Section 5.03 Mistake of Fact 26
Section 5.04 Taxes 26
Section 5.05 Investment Company Act 27
ARTICLE VI: AMENDMENT AND TERMINATION 27
Section 6.01 Right to Amend 27
Section 6.02 Termination of Trust and Reversion of Assets 28
ARTICLE VII: MISCELLANEOUS PROVISIONS 28
Section 7.01 Entire Agreement 28
Section 7.02 Successors 28
Section 7.03 Headings 29
Section 7.04 Controlling Law 29
Section 7.05 Third-Party Inquiries 29
Section 7.06 Courts; Arbitration 29
Section 7.07 Addresses For Communications 29
Section 7.08 Waiver of Notice 30
Section 7.09 Accounting Period 30
Section 7.10 Interest in the Trust Fund 30
Section 7.11 Counterparts 30
EXHIBIT A - Form of Irrevocable Letter of Credit 31
EXHIBIT B - Real Estate Leases 35
EXHIBIT C - Actuarial Assumptions 36
EXHIBIT D - Trust Property 38
EXHIBIT E - Form of Certificate to the Trustee Certificate 39
EXHIBIT F - Individuals Eligible to be Participants 40
EXHIBIT G - Assignment Agreement 41
ii
ALBERTSON'S, INC. 2000 DEFERRED COMPENSATION TRUST
THIS TRUST AGREEMENT is made and entered into the 1st day of January, 2000,
by and between ALBERTSON'S, INC., a Delaware corporation, as grantor, IBJ
Whitehall Bank & Trust Company, a New York banking corporation, as trustee, and
Management Compensation Group, Northwest, LLC, a Delaware limited liability
company, as recordkeeper.
WITNESSETH:
WHEREAS, Albertson's, Inc. is adopting, effective January 1, 2000, the
Albertson's, Inc. 2000 Deferred Compensation Plan as amended from time to time
(the "Plan"); and
WHEREAS, Albertson's, Inc. has incurred or expects to incur liability under
the terms of the Plan with respect to individuals participating in the Plan; and
WHEREAS, Albertson's, Inc. wishes to establish a grantor trust (the
"Trust") for the purpose of accumulating assets to assist it in fulfilling its
obligations under the Plan, to which Trust Albertson's, Inc. shall make
contributions in the amounts determined in accordance with the terms of the Plan
and this trust agreement; and
WHEREAS, Albertson's, Inc. desires the Trustee to hold and administer all
funds and other property contributed by Albertson's, Inc. and the Trustee is
willing to hold and administer such funds pursuant to the terms of this trust
agreement; and
WHEREAS, Albertson's, Inc. desires that the assets of the Trust shall be
available to satisfy the claims of Albertson's, Inc. general creditors in case
of insolvency or bankruptcy;
NOW, THEREFORE, in consideration of the promises, covenants, agreements,
terms, obligations and duties herein set forth, the Trust to be named the
"Albertson's, Inc. 2000 Deferred Compensation Trust" is hereby established
effective from and after the date first above written, and the parties do hereby
covenant and agree, as follows:
ARTICLE I
DEFINITIONS
The following words and phrases are used in this trust agreement and shall
have the meaning set forth in this Article unless a different meaning is clearly
required by the context:
Page 1
"Additional Premium Payment Obligation" shall mean any additional
premiums, assessments, dues, charges and interest on any Insurance Policies held
in the Trust as may be necessary following the satisfaction of the Premium
Payment Obligation to cause each of such Insurance Policies to be paid in full.
"Additional Premium Payment Obligation Amount" shall mean the aggregate
payments required to be made by the Employer to the Trustee in order to satisfy
any Additional Premium Payment Obligation.
"Application" shall mean a written application from a Participant or a
beneficiary of a deceased Participant received by the Recordkeeper requesting a
payment from the Trust by reason of a benefit being due to such Participant or
beneficiary under the Plan.
"Bank" shall mean the commercial bank issuing a Letter of Credit.
"Board of Directors" shall mean the Board of Directors of the Employer.
"Change in Control" shall mean the occurrence in a single transaction
or series of transactions after January 1, 2000, of any one of the following
events or circumstances: (a) merger, consolidation or reorganization where the
beneficial owners of the Voting Securities immediately preceding such merger,
consolidation or reorganization beneficially own less than 80% of the securities
possessing the right to vote to elect directors or to authorize a merger,
consolidation or reorganization with respect to the survivor, after giving
effect to such merger, consolidation or reorganization, (b) merger,
consolidation or reorganization of the Employer where 20% or more of the
incumbent directors of the Employer are changed, (c) acquisition by any person
or group, as defined for purposes of Section 13(d) of the Exchange Act, other
than a trustee or other fiduciary holding Voting Securities under an employee
benefit plan of the Employer (or a corporation owned, directly or indirectly, by
the holders of Voting Securities in substantially the same proportion as their
ownership of Voting Securities) of beneficial ownership of 20% or more of the
Voting Securities (such amount to include any Voting Securities acquired prior
to January 2, 2000), (d) during any period of two consecutive years, individuals
who at the beginning of such period constitute the Board of Directors and any
new director (other than a director designated by a person who has entered into
an agreement with the Employer to effect a transaction described in clauses (a),
(b), (c) or (e) of this paragraph) whose election by the Employer's shareholders
was approved by a vote of at least two-thirds (2/3) of the directors still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute a majority thereof, or (e) approval by the shareholders of
the Employer of a plan of liquidation or dissolution with respect to the
Employer or an agreement for the sale or disposition by the Employer of all or
substantially all the Employer's assets; provided, that in the event the exact
date of a Change in Control cannot be determined, such Change in Control will be
deemed to have occurred on the earliest date on which it could have occurred.
The Trustee and the Recordkeeper shall rely upon notice from the Employer
pursuant to Section 3.05, provided such notice concludes that a Change in
Page 2
Control has occurred. In the absence of such a notice, the Trustee and the
Recordkeeper may require and rely upon an Opinion of Counsel relating to whether
a Change in Control has occurred. Any Opinion of Counsel with respect to a
Change in Control shall specify the date on which the Change in Control
occurred, or if an exact date cannot be determined, the earliest date on which
such Change in Control could have occurred and cover such other matters as the
Trustee or the Recordkeeper shall reasonably require. Notwithstanding the
foregoing, the occurrence of any of the foregoing events or transactions shall
not be deemed to be a Change in Control of the Employer, if prior to the
consummation of any of the foregoing events or transactions, the Continuing
Directors (as defined in paragraph 1 of Article TWELFTH of the Employer's
Restated Certificate of Incorporation, dated May 27, 1998) adopt a resolution to
the effect that a Change in Control for the purposes of this Trust shall not be
deemed to have occurred upon the consummation of any such event or transaction.
"Code" shall mean the Internal Revenue Code of 1986, as from time to time
amended. Reference to a section of the Code shall include that section and any
comparable section or any future legislation that amends, supplements or
supersedes said section.
"Deficiency Amount" shall mean, with respect to each Participant and
beneficiary of a deceased Participant, the amount of unpaid benefits, if any,
and interest thereon, determined in accordance with Section 4.04(c).
"Eligible Person" shall mean an employee of the Employer who is eligible to
participate in the Plan but is not a Participant.
"Employer" shall mean Albertson's, Inc., a corporation organized and
existing under the laws of the State of Delaware, or its successor or
successors.
"Exchange Act" shall mean the Securities Exchange Act of 1934, all
subsequent amendments thereto and any successor statute(s) adopted which
addresses substantially the same subject matter. Further, a reference to any
section of the Exchange Act shall refer to the section in effect on September 1,
1988, all subsequent amendments thereto and any successor section(s) adopted
which addresses substantially the same subject matter.
"Expert" shall mean the Recordkeeper, the Insurance Adviser, the Real
Estate Adviser and any consultant, adviser, engineer, accountant, appraiser,
actuary or other expert hired or retained by the Trustee to provide advice or to
make or assist in making any determination hereunder.
"Expert's Certificate" shall wean a certificate signed by an Expert or, if
the Expert is a corporation or partnership, by two of its executive officers or
partners.
Page 3
"Insurance Adviser" shall mean a person, firm or corporation hired or
retained by the Employer or Trustee to assist it in procuring, modifying,
liquidating or valuing any Insurance Policies held by the Trust.
"Insurance Company" shall mean any insurance company or companies from
which the Employer or Trustee shall have procured Insurance Policies.
"Insurance Policies" shall mean life insurance policies purchased on
the life of any Participant or Eligible Person from any Insurance Company.
"Letter of Credit" shall mean an irrevocable letter of credit issued
for the benefit of the Trustee pursuant to Article III, substantially in the
form attached hereto as Exhibit "A", by a United States commercial bank, or a
United States office of a foreign bank, which issuing bank is acceptable to the
Trustee, has a long-term debt rating by Standard & Poor's Corp. of no less than
A (or the equivalent rating by Moody's Investors Service, Inc.), and whose
combined capital and surplus is no less than $1,000,000,000.
"Majority Participants" shall mean at any time Participants whose Value
of Accrued Benefits then aggregate more than 66-2/3% of the then Value of Total
Accrued Benefits. For purposes of determining "Majority Participants,"
"Participants" shall include persons then considered Participants under the Plan
and beneficiaries of deceased Participants, and the Trustee shall be entitled to
rely on the determination of the Recordkeeper as to whether or not a Participant
or beneficiary of a deceased Participant or a group of Participants or
beneficiaries of deceased Participants constitute "Majority Participants".
"Opinion of Counsel" shall mean a written opinion from legal counsel
acceptable to the Trustee. Such counsel may but need not be legal counsel
regularly retained by the Employer or the Trustee.
"Participant" shall mean an employee of the Employer participating in
the Plan, as well as all former Participants whose benefits under the Plan have
not been fully distributed.
"Plan" shall mean the Albertson's, Inc. 2000 Deferred Compensation
Plan, adopted effective January 1, 2000, as from time to time amended.
"Potential Change in Control" shall mean the occurrence in a
transaction or series of transactions after January 1, 2000, of any one or more
of the following events or circumstances: (a) a tender offer or its substantial
equivalent made by any person or group, as defined for the purposes of Section
13(d) of the Exchange Act, to purchase or otherwise acquire securities of the
Employer which if consummated, together with securities already owned, directly
or indirectly, by the offeror, would give the offeror beneficial ownership,
directly or indirectly, of 20% or more of the Voting Securities, (b) acquisition
by any person or group (other than acquisitions by a trustee or other fiduciary
Page 4
under an employee benefit plan of the Employer, and other than acquisitions by
the personal representative(s), when acting in such capacity, of the estates of
J.A. Albertson and/or Kathryn Albertson), as defined for purposes of Section
13(d) of the Exchange Act, of beneficial ownership of 20% or more of the Voting
Securities (such amount to include any Voting Securities acquired prior to
January 2, 2000), (c) filing or the requirement for filing by any person or
group, as defined for purposes of Section 13(d) of the Exchange Act, of an
initial Schedule 13D or 13G with the Securities and Exchange Commission, or of
an amendment to an existing Schedule 13D or 13G indicating a cumulative increase
in beneficial ownership by any person or group of at least an additional 5% of
the Voting Securities in comparison with such person's or group's Schedule 13D
or 13G on file with the Securities and Exchange Commission as of September 1,
1988, (d) solicitation of proxies by a person or group, as defined for purposes
of Section 13(d) of the Exchange Act (other than management or the Board of
Directors), having beneficial ownership of 1% or more of the Voting Securities
for election, removal or change of directors of the Employer or with respect to
resolutions seeking or directing (1) any transaction or series of transactions
with a person or group, as defined for purposes of Section 13(d) of the Exchange
Act, beneficially owning 5% or more of the Voting Securities, (2) to impose any
restriction, supermajority requirement or other limitation on the power of the
Board of Directors, or (3) sale, merger or other disposition involving more than
20% of the Voting Securities or assets (by book value) of the Employer or (e)
receipt by the Employer of an offer to acquire beneficial ownership of 20% or
more of the Voting Securities by merger, acquisition or otherwise; provided that
in the event the exact date of a Potential Change in Control cannot be
determined, such Potential Change in Control will be deemed to have occurred on
the earliest date on which it could have occurred; and, provided further, that a
particular occurrence of any of the foregoing events or circumstances shall not
be deemed to be a Potential Change in Control if within 15 days after receipt by
the Board of Directors of actual notice from the Employer of the occurrence of a
particular event or circumstance, the Board of Directors adopts a resolution to
the effect that a Potential Change in Control for the purposes of this Trust
shall not be deemed to have occurred (but only if at least a two-thirds majority
of the members of the Board of Directors at the time of adoption of such
resolution were members immediately prior to such event or circumstance). The
Trustee and the Recordkeeper shall rely upon notice from the Employer pursuant
to Section 3.05, provided such notice concludes that a Potential Change in
Control has occurred. In the absence of such a notice, the Trustee and the
Recordkeeper may require and rely upon an Opinion of Counsel relating to whether
a Potential Change in Control has occurred. Any Opinion of Counsel with respect
to a Potential Change in Control shall specify the date on which the Potential
Change in Control occurred, or if an exact date cannot be determined, the
earliest date on which such Potential Change in Control could have occurred and
cover such other matters as the Trustee or the Recordkeeper shall reasonably
require.
"Premium Payment Obligation" shall mean all premiums, assessments,
dues, charges and interest on all the Insurance Policies held in the Trust
necessary to cause each of such Insurance Policies to be paid in full.
Page 5
"Premium Payment Obligation Amount" shall mean the aggregate payments
required to be paid by the Employer to the Trustee in order to satisfy in full
the Premium Payment Obligation.
"Real Estate Adviser" shall mean a person, firm or corporation hired or
retained by the Trustee to manage, or to assist in managing, the real estate
assets and/or the Real Estate Leases held by the Trust or to assist in the sale
by the Trustee of any of the real estate assets held by the Trust.
"Real Estate Leases" shall mean the lease agreements set forth and
described in Exhibit "B" attached hereto and by this reference made a part
hereof, if any, and shall include any future real estate leases entered into
between the Employer and the Trustee pursuant to Section 3.01 with respect to
real property contributed by the Employer to the Trust.
"Recordkeeper" shall mean the person or persons from time to time
serving as recordkeeper with respect to the Trust.
"Repurchase Obligation" shall mean the requirement in each Real Estate
Lease that the Employer repurchase in cash from the Trustee the property which
is the subject of such Real Estate Lease upon a Change in Control or at the
termination of the Real Estate Lease.
"Repurchase Obligation Amount" shall mean the purchase price required
by each Real Estate Lease to be paid by the Employer to the Trustee to
repurchase the property which is the subject of such Real Estate Lease upon a
Change in Control or at the termination of the Real Estate Lease.
"Retention Amount" shall mean $50,000.00.
"Trust" shall mean the trust set forth in and created by this document,
and all subsequent amendments thereto.
"Trust Fund" shall mean all assets held by the Trustee under the Trust.
"Trust Year" shall mean the fiscal year of the Employer.
"Trustee" shall mean the person or persons from time to time serving as
trustee of the Trust.
"Value of Accrued Benefits" shall mean at any time with respect to a
Participant or beneficiary of a deceased Participant an amount equal to the
present value of his or her benefit accrued under the Plan determined based on
the actuarial assumptions described on Exhibit "C" attached hereto, but without
taking into account any changes in pay out options under the Plan made following
a Change in Control, as calculated by the Recordkeeper.
Page 6
"Value of the Trust Fund" shall mean at any time an amount equal to the
then total of the following: (a) the Value of Trust Insurance Policies, (b) the
Value of Trust Real Estate, (c) any undrawn amount under a Letter of Credit
(other than any letter of credit delivered to the Trustee pursuant to the Real
Estate Leases), and (d) the fair market value of all other assets of the Trust
Fund, each as determined by the Trustee.
"Value of Total Accrued Benefits" shall mean at any time an amount
equal to the aggregate of the Value of Accrued Benefits for all Participants and
beneficiaries of deceased Participants as of the date of determination, as
calculated by the Recordkeeper.
"Value of Trust Insurance Policies" shall mean the cash surrender value
at any time of the Insurance Policies held in the Trust, as determined by the
Insurance Adviser.
"Value of Trust Real Estate" shall mean at any time an amount equal to
the aggregate of all Repurchase Obligation Amounts.
"Voting Securities" shall mean securities possessing the right to vote
to elect directors or to authorize a merger, consolidation or reorganization of
the Employer.
In this agreement the singular includes the plural and the plural the
singular; words importing any gender include any other gender; and references to
"days" shall mean calendar days, unless otherwise specified.
ARTICLE II
NAME AND ESTABLISHMENT OF TRUST
Section 2.01. Name and Purpose. The name of the Trust shall be the
"Albertson's, Inc. 2000 Deferred Compensation Trust." This Trust is established
in conjunction with the Plan, and any successor of the foregoing, for the
purpose of holding, investing and distributing assets as a reserve for the
discharge of the Employer's obligations to Participants or beneficiaries of
deceased Participants entitled to benefits pursuant to the provisions of the
Plan.
Section 2.02. Appointment of Trustee; Acceptance. The Employer hereby
appoints IBJ Whitehall Bank & Trust Company, a New York banking corporation, as
sole Trustee for the Trust. The Trustee hereby accepts the appointment as
Trustee under the Trust. In accepting such appointment, the Trustee agrees to
act solely as trustee hereunder and not in its individual capacity; and all
persons having any claim against the Trustee by reason of the transactions
contemplated hereby shall look only to the Trust Fund for payment or
satisfaction thereof, except to the extent otherwise provided in Section 4.17(d)
hereof.
Page 7
Section 2.03. Appointment of Recordkeeper; Acceptance. The Employer
hereby appoints Management Compensation Group, Northwest, LLC, a Delaware
limited liability company, as its Recordkeeper under this Trust. The
Recordkeeper hereby accepts the appointment as Recordkeeper under the Trust. It
is recognized that Management Compensation Group, Northwest, LLC also acts as
the independent consulting actuary of the Employer with respect to the Plan.
Section 2.04. Grantor Trust. The Trust is intended to be a grantor
trust, within the meaning of Section 671 of the Code, and shall be construed
accordingly. The Employer, therefore, agrees that all income, deductions and
credits of this Trust belong to it as owner for income tax purposes and will be
included on the Employer's income tax returns.
ARTICLE III
PROVISIONS RELATING TO THE EMPLOYER
Section 3.01. Contributions. With the execution of this trust agreement
the Employer has transferred to the Trustee the property listed on Exhibit "D"
attached hereto. The Employer may from time to time deliver to the Trustee one
or more Insurance Policies, Letters of Credit, or contribute cash or real
property to the Trust which is acceptable to the Trustee and enter into Real
Estate Leases with the Trustee which are acceptable to the Trustee, in order to
fund all or a portion of its obligation to make contributions to this Trust. All
Employer contributions and all investments thereof, together with all
accumulations, accruals, earnings and income with respect thereto, shall be held
by the Trustee in trust hereunder as the Trust Fund.
Section 3.02. Insurance Policies. The Employer shall give the Trustee
the original of each Insurance Policy established for the benefit of the Trust,
executed by the Insurance Company issuing such Insurance Policy. Upon the
earlier of the occurrence of a Change in Control or Potential Change in Control,
the Employer shall (i) irrevocably assign to the Trustee all ownership interest
the Employer may have in any Insurance Policies held in the Trust, pursuant to
an assignment agreement substantially in the form attached hereto as Exhibit G;
and (ii) pay to the Trustee the Premium Payment Obligation Amount with respect
to the Insurance Policies held in the Trust. If, following the satisfaction of
the Premium Payment Obligation, the Trustee receives a notice from any Insurance
Company regarding the existence of an Additional Premium Payment Obligation, the
Trustee shall so notify the Employer promptly and the Employer shall pay to the
Trustee any Additional Premium Payment Obligation Amount with respect to such
Insurance Policies.
Page 8
Section 3.03. Letters of Credit. The Employer shall give the Trustee
the original of each Letter of Credit established for the benefit of the Trust,
executed by the Bank issuing such Letter of Credit. The Trustee shall draw on
every Letter of Credit to the full extent thereof on the earlier of:
(a) Receipt of an Opinion of Counsel stating that a Change
in Control has occurred;and
(b) On the tenth business day preceding the last day of the
term of each Letter of Credit that is due to expire and has not been
extended, unless, prior to taking such action, the Trustee receives the
original of a replacement Letter of Credit, executed by the Bank
issuing such Letter of Credit, and in at least the amount of the Letter
of Credit which is due to expire;
except to the extent the Trustee has received cash contributions from the
Employer up to the amount of, and in substitution for, the Letter of Credit
which is due to expire.
Section 3.04. Return of Employer Contributions. Subject to Sections
4.06 and 6.02, Employer contributions shall be irrevocable upon the earlier of
the occurrence of a Change in Control or Potential Change in Control. The
foregoing notwithstanding, after the Employer has satisfied its Premium Payment
Obligation or Additional Premium Payment Obligation with respect to all
Insurance Policies, has satisfied its Repurchase Obligation with respect to all
Real Estate Leases, and provided there is then no unpaid Deficiency Amount with
respect to any Participant or beneficiary of a deceased Participant, or at any
time prior to the time when the Trust shall become irrevocable as provided in
Section 6.02 (and without revoking the Trust), the Employer shall be entitled to
a return of a portion of the Trust Fund in accordance with the following:
(a) The Employer shall give not less than 30 days advance
written notice to the Trustee and the Recordkeeper that the Employer is
invoking its rights to a return of a portion of the Trust Fund pursuant
to this Section 3.04.
(b) The Employer may exercise its rights under this Section
3.04 no more frequently than twice during any 12 month period.
(c) Upon receipt of a notice from the Employer pursuant to
Section 3.04(a) the Trustee shall determine the then Value of the Trust
Fund and the Recordkeeper shall determine the then Value of Total
Accrued Benefits. To the extent the then Value of the Trust Fund
exceeds an amount equal to 1.3 times the sum of (1) the then Value of
Total Accrued Benefits, plus (2) the Retention Amount, the Trustee
shall liquidate sufficient Trust assets (or, notwithstanding Section
4.18, distribute Trust assets in kind, as directed by the Employer) and
return such excess to the Employer.
Page 9
Section 3.05. Certain Employer Notices. The Employer hereby agrees to
give prompt notice to the Trustee, the Recordkeeper and each Participant and
beneficiary of a deceased Participant of the occurrence of a Potential Change in
Control or a Change in Control.
Section 3.06. Action by Employer. Whenever the Employer is permitted or
required to perform any act hereunder, it shall be done and performed by an
officer or other delegate duly authorized by the Employer. Promptly following
the execution of this trust agreement, the Employer shall file with the Trustee
and the Recordkeeper a certified list of the names and specimen signatures of
any person authorized to act for the Employer. The Employer shall promptly
notify the Trustee and the Recordkeeper of the addition or deletion of any
person's name to or from such list, respectively. Until receipt of notice that
any person is no longer authorized so to act, the Trustee or the Recordkeeper
may continue to rely on the authority of the person. All certifications, notices
and directions by any such authorized person or persons to the Trustee or the
Recordkeeper shall be in writing signed by such person or persons. The Trustee
and the Recordkeeper may rely on any such certification, notice or direction
purporting to have been signed by or on behalf of such person or persons.
Section 3.07. Employer Liability. Nothing in this trust agreement shall
relieve the Employer of its liabilities to pay the benefits provided for under
the Plan except to the extent such liabilities are met by the application of
Trust assets.
ARTICLE IV
PROVISIONS RELATING TO TRUSTEE AND RECORDKEEPER
Section 4.01. Receiving Contributions. The Trustee shall receive and
accept contributions from the Employer in accordance with this trust agreement
as a reserve for the discharge of the Employer's obligations to Participants and
beneficiaries of deceased Participants entitled to benefits pursuant to the
Plan.
Section 4.02. Management and Control of Trust Assets. The Trustee shall
have exclusive authority and discretion to manage and control all assets in the
Trust Fund, except as may otherwise be provided herein. Notwithstanding the
foregoing, upon the appointment of an Insurance Adviser or Real Estate Adviser
the Trustee shall rely exclusively on the advice of such Insurance Adviser or
Real Estate Adviser, regarding the management and control of the Insurance
Policies or real estate assets and/or Real Estate Leases held by the Trustee,
respectively.
Page 10
Section 4.03. Investment of Trust Assets. The Trustee shall promptly
invest and re-invest the assets of the Trust Fund. Prior to a Change in Control
and so long as a Potential Change in Control has not occurred and continued to
the date of determination, the Trustee shall rely upon any investment directions
from the Employer, and the Trustee shall not be required to inquire into the
propriety of such directions; provided, however, the Trustee shall not be
required to invest assets of the Trust Fund in a manner that it reasonably
believes could result in any damage or liability on the part of the Trustee in
its individual capacity. The Trustee shall not be liable for the consequences of
following such directions. Following a Change in Control and during any period
of time when a Potential Change in Control shall have occurred and be
continuing, the Trustee shall invest and re-invest the assets of the Trust Fund
as it shall determine but only in investments constituting one or more of the
following:
(a) Obligations of the United States Government or any agency
thereof which are supported by the full faith and credit of the United
States Government, and obligations guaranteed by the United States
Government.
(b) Commercial paper rated no less than Prime-l by Moody's
Investors Service, Inc. or as A-l by Standard & Poor's Corp., or
bankers' acceptances or certificates in United States commercial banks
(but only with banks which at the time of purchase have a combined
capital and surplus in excess of $200,000,000 and whose long-term debt
is rated no less than A by Standard & Poor's Corp., or the equivalent
rating by Moody's Investors Service, Inc.), or such instruments
similarly rated by any successor to either of such investment rating
services; provided, no purchases shall be made of commercial paper
which is credit enhanced or which is issued by a company whose
headquarters is outside the United States, and no more than $2,000,000
shall be invested in the commercial paper of any one company.
(c) Direct and general obligations of any state within the
United States, to the payment of the principal of and interest on which
the full faith and credit of such state is pledged, provided at the
time of their purchase such obligations are rated no less than A by
Standard & Poor's Corp. with respect to long-term obligations, or the
equivalent rating by Moody's Investors Service, Inc., and no less than
MIG-l by Moody's Investors Service, Inc. with respect to short-term
obligations, or the equivalent rating by Standard & Poor's Corp.;
provided, no more than $1,000,000 shall be invested in any one issue of
notes or bonds and no more than 15% of the Trust Fund shall be invested
at any time in state obligations; and, provided further, no purchases
shall be made of state obligations which are credit enhanced.
Page 11
(d) Non-interest bearing operating accounts of the Trust with
the Trustee, even though the Trustee does not otherwise meet the
investment requirements of this Section 4.03; provided that if the
Trustee does not meet the investment requirements of this Section 4.03,
such accounts may not in the aggregate exceed $100,000.
(e) Insurance Policies, Real Estate Leases, the property
listed on Exhibit "D" and real property contributed to the Trust by the
Employer.
(f) Temporary investment funds and/or money market funds,
including the IBJ Whitehall Bank & Trust Company Money Market Fund,
which meet the criteria described in Section 4.03(a) through (c).
Section 4.04. Distribution of Trust Assets; Limitations.
(a) At the direction of the Employer to the Recordkeeper prior
to a Change in Control or upon the Application of a Participant or
beneficiary of a deceased Participant after a Change in Control, the
Recordkeeper shall prepare a certification to the Trustee that benefits
under the Plan have become payable, which certification shall be in
substantially the form attached hereto as Exhibit "E." Such
certification shall include the amount of such benefits, the terms of
payment, and the name, address and social security number of the
recipient. Upon the receipt of such certified statement and subject to
Section 4.06, the Trustee shall liquidate such Trust assets as may be
available and necessary to pay the benefits set forth in such
certification and shall make or commence cash distributions from the
Trust Fund in accordance therewith to the person or persons so
indicated and to the appropriate taxing authorities with respect to
taxes required to be withheld; provided, however, that the Trustee
shall not be required to make any distribution which would reduce the
value of the assets of the Trust Fund described in Section 4.03(a)
through (d) to less than the Retention Amount. The Recordkeeper shall
also furnish a copy of such certification to the Participant or the
beneficiary of a deceased Participant. The Trustee shall furnish each
Participant or beneficiary of a deceased Participant with the
appropriate tax information form evidencing such payment and the amount
thereof. The Trustee shall provide the Employer with written
confirmation of any payments hereunder within 10 business days after
such payments are made or commenced to a Participant or beneficiary of
a deceased Participant. Notwithstanding any provision of the Trust to
the contrary, the Trustee shall make payments hereunder before such
payments are otherwise due if, and to the extent that, it (l) receives
a written request therefor from a Participant or beneficiary of a
deceased Participant, which written request specifies the amount to be
distributed,
Page 12
and (2) determines, based on an Opinion of Counsel, that a change in
the federal tax laws, a published ruling or similar announcement
issued by the Internal Revenue Service, the issuance of Treasury
Regulations, a decision by a court of competent jurisdiction involving
a Participant or beneficiary of a deceased Participant, or a closing
agreement involving a Participant or beneficiary of a deceased
Participant made under Section 7121 of the Code, has caused or will
cause a Participant or beneficiary of a deceased Participant to
recognize income for federal income tax purposes with respect to such
amounts before they otherwise would be paid to him or her.
(b) Subject to Section 4.06, the only persons who shall be
entitled to payments from this Trust pursuant to this Section 4.04
following a Change in Control shall be Participants and beneficiaries
of deceased Participants under the Plan as of the Change in Control,
and persons who become beneficiaries of such persons. Following a
Change in Control, no Participant or beneficiary of a deceased
Participant shall be entitled to receive distributions from this Trust
with respect to any benefit accrued under the Plan attributable to
contributions after a Change in Control or to an election made after a
Change in Control to lengthen pay out options under the Plan. The
Trustee shall make distributions pursuant to this Section 4.04 only as
directed by the Recordkeeper and shall be entitled to rely on any
certification received from the Recordkeeper for purposes of complying
with this Section 4.04(b).
(c) Following a Change in Control, payments from the Trust
shall be adjusted for the 12 month period commencing each June 1 in
accordance with the following:
(1) Adjustments to payments from the Trust shall be
made only in the event the Value of the Trust Fund as of the
last day of the immediately preceding Trust Year was less
than an amount equal to the sum of (A) the Value of Total
Accrued Benefits as of the last day of the immediately
preceding Trust Year, plus (B) the Retention Amount.
Page 13
(2) If an adjustment is required, all payments
otherwise payable from the Trust during the applicable 12
month period shall be reduced to an amount equal to the
payment which would otherwise have been made, multiplied by
a fraction, the numerator of which is the Value of the Trust
Fund as of the last day of the immediately preceding Trust
Year, and the denominator of which is an amount equal to the
sum of (A) the Value of Total Accrued Benefits as of the
last day of the immediately preceding Trust Year, plus (B)
the Retention Amount.
(3) Any amount not paid to a Participant or beneficiary
of a deceased Participant by reason of this Section 4.04(c)
shall be considered a Deficiency Amount and shall accrue
interest from the date payment would otherwise have been
made, until paid, at the interest crediting rate provided
for in Exhibit "C".
(4) Deficiency Amounts shall be paid to Participants
and beneficiaries of deceased Participants as soon as
practicable following any Trust Year when, and to the extent
that, the Value of the Trust Fund as of the last day of such
Trust Year exceeds an amount equal to the sum of (A) the
Value of Total Accrued Benefits as of the last day of such
Trust Year, plus (B) the Retention Amount. Payment of
Deficiency Amounts shall be pro rata based on the unpaid
Deficiency Amounts as of the date of payment.
Section 4.05. Protection of Trustee. The Trustee shall be fully
protected in making or refraining from making any payments in accordance with
the terms of this trust agreement.
Section 4.06. Creditors of Employer. The Trust Fund shall at all times
be subject to the claims of the Employer's general creditors but shall be
utilized to satisfy any such claims only in the case of the Employer's
bankruptcy or insolvency. The Employer shall be considered "bankrupt" or
"insolvent" if the Employer is either unable to pay its debts when due or is
subject to a proceeding under the Bankruptcy Code, 11 U.S.C. ss. 101, et seq.
The Board of Directors and chief executive officer of the Employer are
responsible to give written notice to the Trustee and the Recordkeeper of the
Employer's bankruptcy or insolvency as soon as practicable following the
occurrence of such event. Upon receipt of such notice of the Employer's
bankruptcy or insolvency, or in the case of the Trustee's receipt of a written
notice from a creditor of the Employer alleging the Employer's bankruptcy or
insolvency, the Trustee shall discontinue payments to Participants and
beneficiaries of deceased Participants and shall hold the Trust Fund for the
Page 14
benefit of the Employer's general creditors. The Trustee shall resume payments
to Participants and beneficiaries of deceased Participants only after it has
been notified by the Employer (or has received an Expert's Certificate or
Opinion of Counsel stating) that the Employer is no longer bankrupt or insolvent
or pursuant to an order of a court of competent jurisdiction. If the Trustee
discontinues payments to Participants and beneficiaries of deceased
Participants, the first payment following such discontinuance shall include the
aggregate of all payments which would have been made to the Participants and
beneficiaries of deceased Participants Together with interest calculated at the
interest crediting rate provided for in Exhibit "C" on the amount of the delayed
distributions).
Section 4.07. Compensation and Expenses. The Trustee and the
Recordkeeper shall be entitled to receive compensation for services rendered.
Such compensation shall be the usual and customary fees of the Trustee or
Recordkeeper in effect from time to time for similar services unless in the case
of the Trustee, an amount is agreed upon in writing by the Employer and the
Trustee and in the case of the Recordkeeper, the Employer and the Recordkeeper,
and shall, unless paid directly by the Employer, be a lien against and paid out
of the assets of the Trust Fund; provided, an individual serving as Trustee who
receives compensation from the Employer for full-time employment shall not
receive additional compensation from the Trust. The Recordkeeper and the Trustee
(whether or not the Trustee is a full-time employee of the Employer) shall be
reimbursed for any reasonable expenses, including reasonable counsel and Expert
fees, incurred by the Recordkeeper or the Trustee in connection with the
acceptance or administration of the Trust Fund or Trust and the exercise or
performance of any of their respective powers or duties hereunder, and such
expenses shall, unless paid directly by the Employer, be a lien against and paid
out of the assets of the Trust Fund.
Section 4.08. Limitation of Administrative Duties. Nothing contained in
the Plan, either expressly or by implication, shall be deemed to impose any
responsibilities, obligations or duties on the Trustee or the Recordkeeper other
than those set forth herein. Without limiting the generality of the foregoing,
the Trustee shall have no responsibility, obligation or duty with respect to any
action required by the Plan, or this Trust to be taken by the Employer, the
Recordkeeper, the Insurance Adviser, the Real Estate Adviser or any other
Expert, any employee, Participant, beneficiary or any other person, and the
Recordkeeper shall have no responsibility, obligation or duty with respect to
any action required by the Plan or this Trust to be taken by the Employer, the
Trustee, any employee, Participant, beneficiary or any other person.
Section 4.09. Accountings. Within 15 days following the close of each
Trust Year, the Trustee shall file with the Employer and the Recordkeeper, and
with each Participant with respect to each Trust Year ending after a Change in
Control, a written statement and accounting setting forth:
(a) A categorized schedule of the assets and liabilities of the
Trust Fund, at cost and current value, as of the end of the Trust
Year; provided, that the Insurance Policies shall be valued at their
Page 15
cash surrender value; and, provided further, that real estate which is
the subject of a Real Estate Lease shall be valued at its Repurchase
Obligation Amount and all other real estate shall be valued at zero;
(b) A categorized schedule of the receipts, disbursements and
other transactions for the Trust Year; and
(c) A description of all assets purchased and sold during the
Trust Year.
Such accountings shall be in a form and format usable in preparing and filing
returns and reports with the Internal Revenue Service and in accordance with
generally accepted accounting principles. Upon receipt of written approval of
the accounting from the Employer (or upon the passage of 60 days without written
objections having been delivered to the Trustee) such accounting shall be deemed
to be approved, and the Trustee shall be released and discharged as to all
items, matters and things set forth in such accounting.
Section 4.10. General Management Powers. Subject to Section 4.03, with
respect to the Trust Fund the Trustee shall have the following powers, rights
and duties in addition to those otherwise vested in the Trustee herein or by
law:
(a) To sell, exchange, transfer and otherwise deal with the Trust
Fund in such manner, for such consideration and on such terms and
conditions as the Trustee shall determine;
(b) To retain in cash so much of the Trust Fund as the Trustee
shall from time to time determine and to deposit cash with any
depositary;
(c) To register any securities or other property held by it
hereunder in its own name or in the name of its nominees with or
without the addition of words indicating that such securities are held
in a fiduciary capacity, and to hold any securities in bearer form,
but the books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund;
(d) To pay all reasonable costs, charges and expenses incurred in
the administration of the Trust Fund, including fees for reasonable
services rendered to the Trustee by any person, firm or corporation
other than the Employer, and all taxes that may be levied or assessed
under existing or future laws upon or in respect to the Trust or the
Trust Fund or the income thereof;
Page 16
(e) To employ suitable agents (including a Real Estate Adviser)
and counsel who may be counsel for the Employer;
(f) To credit and distribute the Trust Fund pursuant to the terms
of the trust agreement;
(g) To compromise, contest, arbitrate or abandon claims and
demands, all in the Trustee's discretion;
(h) To perform any and all other acts which, in the Trustee's
judgment, are necessary or appropriate for the proper management,
investment and distribution of the Trust Fund;
(i) To retain any funds or property subject to any dispute
(and without liability for the payment of interest) and to refuse
to make payment or delivery thereof until final adjudication by a
court of competent jurisdiction;
(j) To begin, maintain or defend any litigation necessary in
connection with the administration of this Trust and the Trust Fund;
(k) To make such deposits (including certificates of deposit) and
open such number of bank accounts (including interest and noninterest
bearing accounts) in such bank(s) (including the Trustee, and any bank
which is an agent of the Trustee or otherwise a fiduciary with respect
to the Plan and Trust) in the name of the Trustee, and to make
deposits therein in order to facilitate the payment of benefits, as
the Trustee shall determine. The amounts on deposit in each such
account shall constitute a part of the Trust Fund until paid out in
accordance with the Plan;
(l) To maintain accurate records and accounts of all investments,
receipts, disbursements and other transactions of the Trust Fund and
to open such records and accounts to the inspection by the Employer
and its duly authorized representatives during normal business hours
of the Trustee, and to the Participants and their duly authorized
representatives following a Change in Control, during normal business
hours of the Trustee;
(m) To adopt such rules and regulations for the operation and
administration of the Trust as the Trustee shall determine to be
necessary and appropriate and in keeping with the terms and purposes
of the Trust;
(n) To construe and interpret the terms and provisions of this
Trust, and any such construction or interpretation adopted in good
faith shall be binding on the Employer, and any employees, dependents
Page 17
and beneficiaries, and their successors, assigns, executors,
administrators and/or legal representatives;
(o) To withhold any taxes with respect to the property or
income of the Trust Fund or to withhold any amounts otherwise payable
from the Trust Fund; and to dispose of any amounts so withheld as
determined by the Trustee;
(p) To hold the Trust Fund assets for the benefit of the
creditors of the Employer and to deliver assets to satisfy such
creditor's claims as directed by a court of competent jurisdiction
pursuant to Section 4.06; and
(q) To do any and all other acts and things necessary, proper
or advisable to effectuate the purposes of this Trust to the extent the
same are permissible under applicable laws.
Section 4.11. Insurance Policies.
(a) Prior to the occurrence of a Change in Control or
Potential Change in Control, the Trustee, upon written direction of the
Employer, shall pay from the Trust Fund such sums to any Insurance
Company as the Employer may direct. The Employer shall prepare the
application for any Insurance Policies to be applied for. Subject to
Section 3.02 and the provisions hereinafter set forth in this Section
4.11, the Employer, prior to the occurrence of a Change in Control or
Potential Change in Control may, in its sole discretion, retain
complete and absolute ownership of all or any portion of the Insurance
Policies held in the Trust or may, in its discretion, cause the Trustee
to retain ownership of all or any portion of the Insurance Policies
held in the Trust. The Trustee shall receive and hold in the Trust,
subject to the provisions hereinafter set forth in this Section 4.11,
all Insurance Policies so obtained.
(b) Prior to the occurrence of a Change in Control or a
Potential Change in Control, the Trustee, irrespective of any ownership
interest it may hold in any Insurance Policies held in the Trust, shall
have no discretion (i) with respect to the exercise of any of the
powers enumerated or implied under this Section 4.11 or (ii) to take
any other action permitted by any Insurance Policy held in the Trust,
but shall exercise such powers or take such action only upon the
written direction of the Employer. Prior to the occurrence of a Change
in Control or a Potential Change in Control, the Trustee shall have no
duty to exercise any of such powers or to take any such action unless
and until it shall have received such direction.
Page 18
(c) Prior to the occurrence of a Change in Control or
Potential Change in Control, the Employer shall direct the Insurance
Company to notify the Employer of all premiums and other payments due
or to become due, the respective amounts of any said premiums or
amounts, and the respective dates when such amounts are due, whereupon
the Employer shall verify the names of the individual Participants
covered under such Insurance Policies; thereafter, the Trustee, upon
written direction of the Employer, shall promptly pay from the Trust
Fund as soon as practicable thereafter any premiums, assessments, dues,
charges and interest, if any, with respect to any Insurance Policy held
in the Trust Fund. Prior to the occurrence of a Change in Control or a
Potential Change in Control, the Trustee shall have no duty to make
such payment unless and until it shall have received such direction.
(d) Upon the occurrence of a Change in Control or a Potential
Change in Control, the Trustee, pursuant to the assignment stipulated
in Section 3.02, shall be the complete and absolute owner of the
Insurance Policies held in the Trust, shall have power without consent
of any other person, to exercise any and all the rights, options or
privileges that belong to the absolute owner of any Insurance Policy
held in the Trust or that are granted by the terms of any such
Insurance Policy or by the terms of this trust agreement.
(e) In the event of a sale, assignment or surrender of any
Insurance Policy held in the Trust Fund, or the receipt by the Trustee
of any interest, dividend or other payments in respect of any Insurance
Policy, the Trustee shall hold in the Trust Fund the proceeds of any
such sale, assignment or surrender, any and all interest and other
payments of any kind received in respect of any Insurance Policy and
shall invest such funds in accordance with Section 4.03.
(f) No Insurance Company that may issue any Insurance Policy
shall be deemed to be a party to this trust agreement for any purpose,
or to be responsible in any way for the validity of this trust
agreement or have any liability under this trust agreement other than
as stated in each Insurance Policy that it may issue. Upon the
occurrence of a Change in Control or a Potential Change in Control, any
Insurance Company may deal with the Trustee as sole owner of any
Insurance Policy issued by it and held in the Trust Fund, without
inquiry as to the authority of the Trustee to act, and may accept and
rely upon written notice, instruction, direction, certificate or other
communication from the Trustee believed by it to be genuine and to be
signed by an officer of the Trustee and shall incur no liability or
responsibility for so doing. Any sums paid out by any Insurance
Company, under any of the terms of the Insurance Policies issued by it
and held in the Trust Fund, either to the Trustee, or, in accordance
Page 19
with its direction, to any other person or persons the Trustee shall
designate as payces shall be a full and complete discharge of the
liability to pay such sums, and the Insurance Company shall have no
obligation to look to the disposition of any sums so paid. No Insurance
Company shall be required to look into the terms of this trust
agreement, to question any action of the Trustee or to see that any
action of the Trustee is authorized under the terms of this trust
agreement.
(g) Anything contained in this trust agreement to the contrary
notwithstanding, neither the Employer nor the Trustee shall be liable
for the refusal of any Insurance Company to issue or change any
Insurance Policy or Insurance Policies or to take any action requested
by the Trustee; nor for the form, genuineness, validity, sufficiency or
effect of any Insurance Policy or Insurance Policies held in the Trust
Fund; nor for the act of any person or persons that may render any such
Insurance Policy or Insurance Policies null and void; nor for the
failure of any Insurance Company to pay the proceeds and avails of any
such Insurance Policy or Insurance Policies as and when the same shall
become payable.
(h) In the event any conflict occurs between the provisions of
any Insurance Policy and either this trust agreement or the Plan, the
provisions of the trust agreement or Plan shall govern and control, as
applicable.
Section 4.12. Liability for Breach of Fiduciary Duty. Except as
provided in Section 4.17(d), the Trustee shall not be liable for any losses to
the Trust Fund resulting from the breach of any of the responsibilities,
obligations or duties imposed upon the Trustee herein or by applicable laws.
Section 4.13. Consultation and Indemnification.
(a) The Trustee and the Recordkeeper may consult with counsel,
and neither the Trustee nor the Recordkeeper shall be deemed imprudent
by reason of taking or refraining from taking any action in accordance
with an Opinion of Counsel.
(b) The Employer hereby indemnifies the Trustee and holds it
harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, claims, demands, costs and
expenses of any kind or nature whatsoever, including, without
limitation, attorney's fees and disbursements (except those caused by
the Trustee's gross negligence or willful misconduct) that may be
imposed on, incurred by or asserted against the Trustee in any way
relating to or arising out of or in connection with this trust
agreement, the acceptance or administration by the Trustee of the Trust
or the Trust Fund, the exercise or performance by the Trustee of any of
Page 20
its powers or duties hereunder and any of the transactions contemplated
by this trust agreement, including (but not limited to) distributions
to Participants, beneficiaries of deceased Participants and upon the
termination of the Plan or Trust.
(c) The Employer hereby indemnifies the Recordkeeper and holds
it harmless from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, claims, demands, costs
and expenses of any kind or nature whatsoever, including, without
limitation, attorney's fees and disbursements (except those caused by
the Recordkeeper's gross negligence or willful misconduct) that may be
imposed on, incurred by or asserted against the Recordkeeper in any way
relating to or arising out of or in connection with this trust
agreement, the exercise or performance by the Recordkeeper of any of
its powers or duties hereunder and any of the transactions contemplated
by this trust agreement.
(d) Neither the Trustee nor the Recordkeeper shall be required
to give any bond or any other security for the faithful performance of
their respective duties under this trust agreement, except as such may
be required by any law which prohibits the waiver thereof.
(e) The Employer shall assume, at its own expense, the defense
of any action commenced against the Trustee or the Recordkeeper
asserting any claim which would be covered by the indemnities set forth
in this Section 4.13. The Trustee and the Recordkeeper shall each have
the right to employ its own counsel in any such action to which it is a
party, and the reasonable fees and expenses of such counsel shall be
borne by the Employer.
(f) The Employer's obligations under this Section 4.13 shall
survive the termination of this trust agreement and the resignation or
removal of any Trustee.
Section 4.14. Resignation and Removal. The Trustee and/or the
Recordkeeper shall resign or be removed and a successor Trustee and/or
Recordkeeper appointed according to the following procedures:
(a) The Trustee may be removed by the Employer at any time
prior to a Change in Control, with or without cause, and following a
Change in Control, with or without cause but only with the written
consent of the Majority Participants, upon the giving of not less than
31 days prior written notice. The Trustee may resign upon the giving of
not less than 31 days prior written notice to the Employer and all
Participants and beneficiaries of deceased Participants. No resignation
Page 21
or removal of the Trustee pursuant to this Section 4.14 shall become
effective until the acceptance of appointment by the successor Trustee.
(b) Prior to a Change in Control the Employer shall fill a
vacancy in the office of Trustee as soon as practicable by a written
instrument filed with the person(s) appointed to fill the vacancy,
which person(s) must be a financial institution that is independent of
the Employer, and a copy to the predecessor Trustee and the
Recordkeeper. Following a Change in Control, the Employer shall be
entitled to fill a vacancy in the office of Trustee, but only with the
consent and approval of the Majority Participants, as evidenced in a
written instrument filed with the person(s) appointed to fill the
vacancy which person(s) must be a financial institution that is
independent of the Employer. If the vacancy in the office of Trustee
has not been filled within 20 days following the Trustee's resignation
or removal, the Trustee shall have the right to petition a court of
competent jurisdiction to appoint a successor Trustee.
(c) The appointment of a successor Trustee shall take effect
upon delivery to the Trustee of a written appointment of such successor
Trustee, duly executed by the Employer, the Majority Participants, or
the predecessor Trustee as the case may be, and a written acceptance by
such successor Trustee, duly executed thereby. Except as described in
the preceding sentence, a successor Trustee shall succeed to the title
to the assets in the Trust Fund without the signing or filing of any
document and the rights and obligations of the Trustee under each
Insurance Policy or Letter of Credit shall automatically become the
rights and obligations of the successor Trustee, and the Trustee shall
have no further rights, duties, obligations or liabilities with respect
to any Insurance Policy, Letter of Credit or Real Estate Lease. The
resigning or removed Trustee shall execute all documents and do all
acts reasonably necessary to vest such title of record in the successor
Trustee. A successor Trustee shall have all of the powers conferred by
this trust agreement as if originally named Trustee.
(d) Within 60 days after transfer of the assets in the Trust
Fund, the resigning or removed Trustee shall render to the Employer a
statement and accounting in the form and manner prescribed by Section
4.09. Unless the Employer shall, within 60 days after receipt of such
accounting, object in writing delivered to such Trustee, such
accounting shall be deemed approved, and the Trustee shall be released
and discharged as to all items, matters and things set forth in such
accounting.
(e) A successor Trustee shall not be liable or responsible for
any acts or defaults of a predecessor Trustee or co-Trustee, or for any
losses or expenses resulting from or occasioned by anything done or
Page 22
neglected to be done in the administration of the Trust Fund or Trust
prior to its appointment as Trustee, nor shall it be required to
inquire into or take notice of the prior administration of the Trust
Fund or Trust.
(f) The Recordkeeper may be removed by the Employer at any
time prior to a Change in Control, with or without cause, and following
a Change in Control, with or without cause but only with the written
consent of the Majority Participants, upon the giving of not less than
31 days prior written notice to the Recordkeeper. The Recordkeeper may
resign on the giving of not less than 31 days prior written notice to
the Trustee, the Employer and all Participants and beneficiaries of
deceased Participants. No resignation or removal of the Recordkeeper
pursuant to this Section 4.14 shall become effective until the
acceptance of appointment by the successor Recordkeeper.
(g) Prior to a Change in Control, the Employer shall fill a
vacancy in the office of Recordkeeper as soon as practicable by a
written instrument filed with the person(s) appointed to fill the
vacancy, which person(s) must be independent from the Employer and must
be a certified consulting actuary or firm of actuaries or certified
public accountant or firm of certified public accountants, and a copy
to the predecessor Recordkeeper and the Trustee. Following a Change in
Control, the Employer shall be entitled to fill a vacancy in the office
of Recordkeeper, but only with the consent and approval of the Majority
Participants, as evidenced in a written instrument filed with the
person(s) appointed to fill the vacancy, which person(s) must be
independent from the Employer and must be a certified consulting
actuary or firm of actuaries or certified public accountant or firm of
certified public accountants. If the vacancy in the office of
Recordkeeper has not been filled within 20 days following the
Recordkeeper's resignation or removal, the Trustee shall have the right
to appoint a successor Recordkeeper. The appointment of a successor
Recordkeeper shall take effect upon delivery to the Recordkeeper, with
a copy to the Trustee, Employer and all Participants and beneficiaries
of deceased Participants, of a written appointment of such successor
Recordkeeper, duly executed by the Employer, the Majority Participants
or the Trustee, as the case may be, and a written acceptance by such
successor Recordkeeper, duly executed thereby. As soon as practicable
after the Recordkeeper has resigned or has been removed hereunder, it
shall deliver to the successor Recordkeeper all reports, records,
documents and other written information in its possession regarding the
Elan, the Trust Fund and the Participants, and thereupon shall be
entitled to all unpaid fees, compensation and reimbursements to which
it is entitled under this Trust and shall be relieved of all
responsibilities and duties under this Trust.
Page 23
(h) If the Trustee consolidates, merges or converts into, or
transfers all or substantially all its trust business or assets to
another corporation, the resulting, surviving or transferee corporation
without any further act shall be the successor Trustee.
Section 4.15. Duties of the Recordkeeper. Within 10 days following the
close of each Trust Year ending after a Change in Control, the Recordkeeper
shall file with the Employer and the Trustee a written statement setting forth
for each Participant and beneficiary of a deceased Participant his or her Value
of Accrued Benefits and account balance(s) as of the last day of such Trust
Year. In the event the Employer fails to provide the Recordkeeper with the
information necessary to prepare such written statement, the Recordkeeper shall
file the written statement based on a good faith estimate of the Value of
Accrued Benefits and account balance(s). In addition, the Recordkeeper shall
maintain or cause to be maintained all the Participant records required by this
Trust and shall perform such other duties and responsibilities necessary or
advisable to achieve the objectives of this Trust. Following a Change in
Control, the Recordkeeper shall prepare and distribute to the Employer,
Participants and beneficiaries of deceased Participants, Participant statements
which shall include income tax information, if that information is supplied to
the Recordkeeper by the Employer, or its delegate, with respect to payments to
Participants and beneficiaries of deceased Participants. In the event that the
Employer refuses or neglects to provide updated Participant information, as
contemplated herein, the Recordkeeper shall be entitled to rely on the most
recent information furnished to it by the Employer. The Recordkeeper shall have
no responsibility to verify information provided to it by the Employer;
provided, however, no information provided by the Employer following a Change in
Control shall reduce any benefit to which a Participant or beneficiary of a
deceased Participant was entitled under the Plan or this Trust as of the Change
in Control.
Section 4.16. Determinations by the Trustee; Notices. Within 21 days
following receipt by the Trustee of written notice from any Participant or
beneficiary of a deceased Participant that such Participant or beneficiary
believes a Potential Change in Control or Change in Control has taken place, the
Trustee shall determine if a Potential Change in Control or Change in Control
has in fact occurred, in accordance with the procedures set forth in the
definitions of such terms. Within 5 days of making the foregoing determination
the Trustee shall give written notice of its determination to the Employer,
Recordkeeper and all Participants and beneficiaries of deceased Participants,
which notice shall attach a complete copy of any Opinion of Counsel rendered to
the Trustee with regard to the foregoing, a complete copy of the notice to the
Trustee alleging that a Potential Change in Control or Change in Control has
occurred as well as all materials in the possession of the Trustee which relate
to the foregoing determinations.
Section 4.17. Rights of Trustee.
(a) The Trustee may rely on any document believed by
it to be genuine and to have been signed or presented by the proper
person.
Page 24
(b) Before the Trustee acts or refrains from acting, and in
making any determination with respect to a Change in Control, a
Potential Change in Control, the Value of the Trust Fund or any other
determination hereunder (including but not limiting to determinations
of the validity of consents of the Majority Participants), the Trustee
may require and rely on an Expert's Certificate or an Opinion of
Counsel or both covering such matters as the Trustee may reasonably
require The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Expert's Certificate or
Opinion of Counsel or with the consent of the Majority Participants.
(c) The Trustee may act through agents and Experts and shall
not be responsible for the misconduct or negligence of any agent or
Expert appointed and retained with due care or with the consent of the
Employer or the Majority Participants.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or
within its rights or powers, provided that the Trustee's conduct does
not constitute gross negligence or willful misconduct. The Trustee
shall be liable for any action it takes or omits to take and which
constitutes gross negligence or willful misconduct.
(e) No provision of this trust agreement shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably
assured to it.
Section 4.18. Priority of Distribution and Liquidation of Trust Assets.
Whenever Trust assets are required to be distributed pursuant to this trust
agreement, the Trustee shall pay such distributions with cash on hand, if any.
To the extent cash on hand (not including the Retention Amount) is not
sufficient to pay such distributions, the Trustee shall in the following
priority: (a) liquidate investments described in Section 4.03 other than
paragraph (e) thereof, (b) draw on any Letter of Credit held by the Trust to the
extent necessary to pay the required distribution, (c) liquidate real estate
assets and/or Real Estate Leases held by the Trust and (d) liquidate any
Insurance Policies held by the Trust.
Page 25
ARTICLE V
GENERAL ADMINISTRATIVE PROVISIONS
Section 5.01. Exchange of Information by the Employer and the Trustee.
The Trustee shall furnish to or on the order of the Employer whatever
information relating to the Trust Fund is necessary for the performance by the
Employer of its functions with respect to the Plan or this Trust. The Employer
shall furnish to or on the order of the Trustee whatever information relating to
the Trust Fund and Participants and beneficiaries of deceased Participants is
necessary for the performance by the Trustee of its functions hereunder. The
Employer and Trustee may each rely and act upon information so furnished without
further inquiry.
Section 5.02. Information to the Recordkeeper and Trustee. The Employer
shall provide the Recordkeeper with a certified copy of the Plan and all
amendments thereto, and the resolutions or other actions of the Employer
approving the Plan and all amendments thereto, promptly upon their adoption and
all information necessary to determine the benefits payable to or with respect
to each Participant, including any benefits payable after each Participant's
death and the recipient of the same. The Employer shall regularly, at least
annually, or promptly on the request of the Recordkeeper, furnish revised
updated information to the Recordkeeper. In addition, promptly after the last
day of each calendar year quarter the Employer agrees to notify the Trustee and
Recordkeeper as to those persons who are then Participants or beneficiaries of
deceased Participants, which notice shall specify the name, address and social
security number of such persons. The Trustee shall be entitled to rely on the
latest available written notice from the Employer regarding such information.
The Employer shall be responsible for keeping accurate books and records with
respect to the employees of the Employer, their compensation and their rights
and interests in the Trust Fund and under the Plan.
Section 5.03. Mistake of Fact. Any misstatement or any other mistake of
fact in any certificate, notice or other document filed with the Employer, the
Recordkeeper or the Trustee shall be corrected when it becomes known and proper
adjustment shall be made by reason thereof; provided, however, the Trustee shall
offset any overpayment to any Participant or beneficiary of a deceased
Participant against future payments to such Participant or beneficiary but shall
have no obligation to seek reimbursement from any Participant, beneficiary of a
deceased Participant or other person to whom the Trustee has disbursed amounts
from the Trust Fund pursuant to any such certificate, notice or other document.
Section 5.04. Taxes. The Employer may from time to time pay taxes of
any and all kinds whatsoever which at any time are levied or assessed upon or
become payable in respect of the Trust Fund, the income therefrom or any
property forming a part thereof, or any purchase, sale, collateral security or
other transaction pertaining thereto. To the extent that any taxes levied or
Page 26
assessed upon the Trust Fund or in respect of such income, property or
transaction are not paid by the Employer, the Trustee shall pay such taxes out
of the Trust Fund and the Employer shall reimburse the Trustee for any amounts
so paid. The Trustee shall, at the Employer's expense, contest the validity of
such taxes in any manner deemed appropriate by the Employer or its counsel, but
only if the Trustee has received an indemnity bond or other security
satisfactory to it to pay all of its fees and expenses with respect to such
contest; provided, however, the Trustee shall have no obligation to contest if
it receives an Opinion of Counsel to the effect that there is no reasonable
basis in law or fact for such contest. Alternatively, the Employer may itself
contest the validity of any such taxes.
Section 5.05. Investment Company Act. Notwithstanding any other
provision of this trust agreement, the Employer and the Trustee agree that in
the event the Trust may be deemed to be an "investment company" as defined under
the Investment Company Act of 1940, as amended (the "Investment Company Act"),
they shall use their best efforts to take such action as shall be necessary so
that either (i) the Trust will qualify for an exemption from the provisions of
the Investment Company Act or (ii) the Trust will not be deemed to be such an
investment company.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.01. Right to Amend. Prior to the time when the Trust shall
become irrevocable as provided in Section 6.02, this trust agreement may be
amended by an instrument in writing, duly executed by the Employer and delivered
to the Trustee, which instrument shall certify to the Trustee that the Trust has
not become irrevocable. When the Trust shall become irrevocable as provided in
Section 6.02, this trust agreement may not thereafter be amended in whole or
part by the Employer; provided, however, that this trust agreement may
nonetheless be amended by an instrument in writing, duly executed by the
Employer, and delivered to the Trustee and all Participants and beneficiaries of
deceased Participants only (a) with the express written consent of the Majority
Participants on the date of such amendment, (b) as necessary to obtain a
favorable ruling from the Internal Revenue Service with respect to the tax
consequences of the establishment or settlement of the Trust as a grantor trust
within the meaning of Section 671 of the Code, (c) as necessary to obtain an
Opinion of Counsel that the Plan is an unfunded plan of deferred compensation or
(d) as necessary to prevent the Trust from being deemed an "investment company"
as defined under the Investment Company Act or to ensure that the Trust
qualifies for an exemption from the provisions of such act. Provided, that the
duties, powers and liabilities of the Trustee shall not be increased without the
Trustee's written consent, and, provided further, that the amount or time for
payment of any benefit hereunder to any Participant or beneficiary of a deceased
Participant may not be reduced or adversely affected without the written consent
of the affected Participant or beneficiary.
Page 27
Section 6.02. Termination of Trust and Reversion of Assets. Following
the occurrence of a Change in Control or Potential Change in Control, and
regardless of whether or not such Potential Change in Control shall exist as of
a later date of determination, the Trust shall be irrevocable; provided that the
Trust shall nonetheless terminate upon the earlier of (a) the payment of all
amounts due Participants and beneficiaries of deceased Participants under the
Plan, as determined by the Recordkeeper, and (b) the later of (i) January 1,
2025, and (ii) the date which is 21 years following the death of the last
surviving individual eligible to be a Participant listed on Exhibit "F" attached
hereto and by this reference made a part hereof. At any time prior to a Change
in Control or Potential Change in Control the Trust may be revoked by the
Employer by an instrument in writing delivered to the Trustee and accompanied by
an Opinion of Counsel stating that the Trust is revocable and that neither a
Change in Control nor a Potential Change in Control has occurred. The foregoing
to the contrary notwithstanding, if the Trustee has received notice, pursuant to
Section 3.05 or Section 4.16, that a Change in Control or Potential Change in
Control may have occurred, the Trust may not be revoked until the Trustee has
determined that a Change in Control or Potential Change in Control has not
occurred. Upon revocation of the Trust, any and all assets remaining in the
Trust Fund after payment of the Trustee's and Recordkeeper's compensation and
other expenses of the Trust, shall revert to the Employer and the Trustee shall
promptly transfer any such assets to the Employer. Upon termination of the Trust
other than by revocation, the Trustee shall pay all amounts due Participants and
beneficiaries of deceased Participants under the Plan, as determined by the
Recordkeeper, and any and all assets remaining in the Trust Fund after payment
of the Trustee's and Recordkeeper's compensation and other expenses of the
Trust, shall revert to the Employer and the Trustee shall promptly transfer any
such assets to the Employer. Upon termination of the Trust for whatever reason
the Trustee shall prepare and file a final statement and accounting with the
Employer and all necessary returns, statements, forms and reports as may be
required of the Trustee by law. Upon receipt of written approval of the
accounting from the Employer (or upon the passage of 60 days without written
objections having been delivered to the Trustee) such accounting shall be deemed
approved, and the Trustee shall be released and discharged as to all items,
matters and things set forth in such accounting.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.01. Entire Agreement. This trust agreement constitutes the
entire understanding and agreement between the parties and supersedes all prior
agreements, representations and understandings relating to the subject matter
hereof.
Section 7.02. Successors. This trust agreement shall be binding upon
all persons entitled to benefits under the Plan and their respective heirs and
personal representatives, upon the Employer, its successors and assigns, and
upon the Trustee and its successors.
Page 28
Section 7.03. Headings. The headings used in this trust agreement are
inserted for reference purposes only and shall not be deemed to limit or affect
in any way the meaning or interpretation of any of the terms or provisions of
this trust agreement.
Section 7.04. Controlling Law. Except to the extent superseded by the laws
of the United States of America, the laws of the State of Idaho (other than the
choice of law principles thereof) shall govern all questions arising with
respect to this trust agreement and the interpretation and validity of its
provisions.
Section 7.05. Third-Party Inquiries. No person dealing with the Trustee
shall be obliged to see to the application of any money paid or property
delivered to the Trustee, or as to whether or not the Trustee has acted pursuant
to any authorization required or set forth in this trust agreement.
Section 7.06. Courts; Arbitration. The Employer agrees that by the
establishment of this Trust it hereby foregoes any judicial review of
certification by the Recordkeeper as to the benefit payable to any person
hereunder. If a dispute arises as to the amounts or timing of any such benefits
or the persons entitled thereto under the Plan or this Trust, the Employer
agrees that such dispute shall be resolved by binding arbitration proceedings
initiated in accordance with the rules of the American Arbitration Association
and that the results of such proceeds shall be conclusive and shall not be
subject to judicial review. It is expressly understood and agreed that pending a
resolution of any such dispute, payment of benefits shall be made and continued
by the Trustee in accordance with the certification by the Recordkeeper and that
the Trustee and the Recordkeeper shall have no liability with respect to such
payments. The Employer agrees to pay the entire cost of any arbitration or legal
proceeding, including the legal fees of the Trustee, the Recordkeeper and the
Participant or the beneficiary of any deceased Participant regardless of the
outcome of any such proceeding or the party which initiated any such proceeding,
and until so paid the expenses thereof shall be a charge on and lien against the
Trust Fund. The Employer agrees to pay the foregoing costs as such costs are
incurred, but not more frequently than on a monthly basis. Nothing in this
Section shall be construed to in any way limit any right or remedy a Participant
or beneficiary may have under the Plan.
Section 7.07. Addresses For Communications. All communications, directions,
notices and requests required or permitted to be given hereunder shall be in
writing and shall be given to the following:
If to Employer, to: Albertson's, Inc.
250 Parkcenter Blvd.
Boise, Idaho 83726
Attention: Corporate Secretary
Page 29
If to Trustee, to: IBJ Whitehall Bank & Trust Company
One State Street
New York, New York 10004
Attention: Nicholas J. Cascio
and
Hughes, Hubbard and Reed
One Battery Park Plaza
New York, New York 10004-1482
Attention: Gilson Gray, Esq.
If to Recordkeeper, to: Management Compenstion Group, Northwest LLC
205 SE Spokane Street
Portland, Oregon 97202
Attention: David J. Taylor (or his successor
regarding Albertson's, Inc.)
If to a Participant or beneficiary of a deceased participant, to the last known
address of the Participant or beneficiary on the books and records of the
Employer, the Trustee or the Recordkeeper; provided, however, the Trustee shall
be entitled to rely on the latest available written notice from the Employer
regarding the names and addresses of such persons.
Either the Employer, the Recordkeeper or the Trustee shall have the right to
specify in writing in the manner above provided, another address to which
subsequent communications, directions, notices and requests to such party shall
be given. Any communications, directions, notices and requests given hereunder
shall be deemed to have been given as of the date received in writing by the
party to whom given.
Section 7.08. Waiver of Notice. Any notice required by this trust agreement
may be waived by the person entitled thereto.
Section 7.09. Accounting Period. The annual accounting period for this
Trust shall be the Trust Year.
Section 7.10. Interest in the Trust Fund. No employee of the Employer, no
dependent or personal representative of an employee of the Employer or person
claiming through such an employee and no beneficiary under the Plan shall have
any right, title or interest in the Trust or Trust Fund at any time prior to
satisfaction of all conditions to a right to payment to such beneficiary from
the Trust pursuant to the terms of the Plan and Trust. No benefit, right or
interest, if any exists, is transferable or assignable by any employee,
dependent or beneficiary and any attempt to effect a transfer or assignment is
void. No portion of the Trust Fund shall be subject to attachment, garnishment,
levy of execution, bankruptcy proceedings or other legal process of any creditor
of any of the Participants or beneficiaries. Notwithstanding any other provision
of this Trust to the contrary, the Trust Fund shall at all times remain subject
to claims of creditors of the Employer in the event the Employer is adjudicated
to be bankrupt or insolvent as provided herein.
Section 7.11. Counterparts. This trust agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which shall together constitute only one agreement.
IN WITNESS WHEREOF, the parties hereto have caused this trust agreement to
be executed the day and year first above written.
EMPLOYER:
ALBERTSON'S, INC.
/s/ Thomas R. Saldin
By: Thomas R. Saldin
Its: Executive Vice President and
General Counsel
TRUSTEE:
IBJ WHITEHALL BANK & TRUST COMPANY
/s/ Nicholas J. Cascio
By: Nicholas J. Cascio
Its: Vice President
RECORDKEEPER:
MANAGEMENT COMPENSATION GROUP, NORTHWEST, LLC
/s/ David J. Taylor
By: David J. Taylor
Its: Vice President, Account Executive
Page 30
EXHIBIT "A"
FORM OF IRREVOCABLE LETTER OF CREDIT
[Date of Issuance]
IBJ Whitehall Bank & Trust Company, as Trustee
[Address]
Attention: [ ]
Dear Ladies and Gentlemen:
At the request and for the account of Albertson's, Inc., a Delaware
corporation ("Albertson' s"), we hereby establish in your favor (and in favor of
your successors, the terms "you" and "yours" referring to you and any
successor), as Trustee under the Albertson's, Inc. 2000 Deferred Compensation
Trust established pursuant to the trust agreement between Albertson's,
Management Compensation Group, Northwest, LLC, a Delaware limited liability
company, and IBJ Whitehall Bank & Trust Company, dated [ ] (the "Trust
Agreement"), this Irrevocable Letter of Credit No. [ ] in the amount of U.S. $[
] (the "Maximum Amount"). This Letter of Credit is effective immediately and
shall expire at the close of banking business at our office at [address] on
[expiration date] unless terminated earlier, or extended, in either case in
accordance with the provisions hereof. The amount of this Letter of Credit will
be reduced from time to time as hereinafter provided.
Funds under this Letter of Credit are available to you, in multiple,
partial drawings or as a single lump sum drawing hereunder, against delivery to
us of the following documents presented (which presentation may be made by
facsimile transmission) on a Business Day (as hereinafter defined) at our letter
of credit department at [insert address] or at [insert telecopier number], to
the specific attention of [ ] or at any other office or telecopier number which
may be designated by us by written notice delivered to you:
1. A sight draft in the form of Annex I hereto, appropriately completed
and drawn on us bearing the number of this Letter of Credit and in an amount not
in excess of the Maximum Amount, less the amount of any sight draft previously
presented under this Letter of Credit.
2. Your signed certificate in the form of Annex II, appropriately
completed.
3. A copy of this Letter of Credit.
For purposes of this Letter of Credit, the term "Business Day" shall
mean a day on which our letter of credit department specified above as the place
for presentation of documents hereunder is open for business.
Page 31
This Letter of Credit shall be payable at sight on first demand without
prior notice being given to Albertson's by either you or us. Payment of any
sight draft shall be made in immediately available funds at or before the close
of business on the Business Day next following the day of your presentation of
documents, if such presentation is made prior to 2:00 p.m., New York City time,
on any Business Day.
The amount available under this Letter of Credit shall be automatically
reduced by the amount of each draft paid hereunder (effective on the date of
payment of such draft).
Upon the earlier to occur of any one of the following events: (i) the
surrender to us by you of this Letter of Credit for cancellation, and (ii) the
expiration date stated in the initial paragraph hereof, this Letter of Credit
shall automatically expire.
Communications with respect to this Letter of Credit shall be addressed
to us at [address], specifically referring to the number of this Letter of
Credit.
We hereby agree that drafts drawn and presented in compliance with this
Letter of Credit will be paid in accordance with the terms hereof.
It is a condition of this Letter of Credit that it will be
automatically extended for periods of one year from the then relevant expiry
date, unless sixty (60) days prior to that relevant expiry date we notify you by
registered mail, return receipt requested, that we elect not to extend this
Letter of Credit for any additional period.
We hereby agree that all notices to you under this Letter of Credit
will be sent to you by registered mail, return receipt requested, at the address
noted above, or such other address as from time to time specified by you in
writing.
To the extent not inconsistent with the express terms hereof, this
Letter of Credit shall be governed by, and construed in accordance with, the
terms of the Uniform Customs and Practices for Documentary Credits (1983
Revision) International Chamber of Commerce, Publication No. 400 (the "UCP").
This Letter of Credit shall be deemed to be issued under the laws of the State
of [State] (including the Uniform Commercial Code as in effect in said State),
and as to matters not governed by the UCP, shall be governed by, and construed
in accordance with, the laws of the State of [State].
Very truly yours,
[Name of Bank]
By:
Vice President
Page 32
ANNEX I
SIGHT DRAFT
[Date]
For Value Received, pay on demand (by wire transfer in same day funds)
to Account No. [insert number of account to which payment is to be made and name
and address of bank] [ ] United States Dollars ($[ ]).
Charge to Account of (name of account party] Irrevocable Letter of
Credit No. [ ]
To: [Name of Bank]
[Address]
Attention: [ ],
Letter of Credit Operations
[Name of beneficiary under
above-captioned Letter of
Credit]
By:
Title: [Vice President,
Assistant Vice President, Senior
Trust Officer or Trust Officer]
Page 33
ANNEX II
CERTIFICATE
The undersigned hereby certifies to [ ], with reference to the Irrevocable
Letter of Credit No. [ ] (the "Letter of Credit") in favor of IBJ Whitehall Bank
& Trust Company, as trustee (the "Trustee"), as follows (capitalized terms not
otherwise defined in this Certificate shall have the meanings given them in the
Letter of Credit):
1. The person signing this Certificate on behalf of the Trustee is a duly
authorized representative or Attorney-in-Fact or an officer of the Trustee duly
authorized to execute this Certificate.
2. The amount of the sight draft presented with this Certificate does not
exceed the Maximu Amount and is authorized by the Trust
Agreement.
IBJ Whitehall Bank & Trust Company as Trustee
By:
------------------------------------------
Authorized Representative Officer, or
Attorney-in-Fact
Page 34
EXHIBIT "B"
REAL ESTATE LEASES
NONE
Page 35
EXHIBIT "C"
ACTUARIAL ASSUMPTIONS
The calculation of the Value of Accrued Benefits of a Participant or
beneficiary of a deceased Participant under the Plan shall be performed based on
the Investment Option selected by the Participant as a measurement mechanism for
the Rate of Return.
A. Moody's Investment Option
1. Interest Crediting Rate:
For Participants who have selected Moody's as their Investment
Option for all or a portion of their balance, the value of the Accrued
Benefits shall be performed using the Participant's appropriate Account
Balance under the Plan as of the date of calculation, increased at the
interest crediting rate compounded annually to his assumed payment date
(based on his assumed benefit commencement date and the benefit option
elected), decreased at the discount rate compounded annually, and
subject to the following:
(a) During Employment with the Employer. The interest rate used to
credit a Participant's account balance for the period of
employment with the Employer beginning on the date of calculation
and ending on the Participant's assumed payment date shall be the
annual "corporate bond yield average" with respect to "average
corporations" as determined from the Moody's Bond Record
published by Moody's Investors Service, Inc. closest to the
calculation date ("Moody's"), plus 3 percent. Notwithstanding the
foregoing, the interest crediting rate used to credit the account
balance of a Participant who has separated from service and
according to the provisions of the Plan is not eligible for
Moody's, plus 3 percent, shall be Moody's, without further
adjustment.
(b) During Periods not Employed with the Employer. The interest rate
used to credit a Participant's account balance for the period of
non-employment with the Employer beginning on the date of
calculation and ending on the Participant's assumed payment date
shall be the "corporate bond yield average" with respect to
"average corporations" as determined from the Moody's Bond Record
published by Moody's Investors Service, Inc. for the five-year
period immediately preceding the calculation date ("Moody's
Average"), plus 3 percent. Notwithstanding the foregoing, the
interest crediting rate used to credit the account balance of a
Participant who has separated from service and according to the
provisions of the Plan is not eligible for Moody's Average, plus
3 percent, shall be Moody's Average, without further adjustment.
Page 36
2. Discount Rate:
The rate used to discount the Participant's assumed benefit
payments from the assumed payment date to the calculation date shall be
the rate credited to the most recently issued five-year U.S. Treasury
notes as of the calculation date.
3. Assumed Benefit Commencement Date:
The Participant's assumed benefit commencement date shall be
the later of (1) and (2):
(a) Age 62.
(b) Five years from date of calculation.
Provided, under no circumstances shall a Participant's assumed
benefit commencement date be later than age 65.
4. Timing of Payments and Contributions:
All payments to be paid to the Participant shall be assumed
paid at the end of the year. All contributions deferred by the
Participant shall be assumed contributed as of the beginning of each
year.
5. Mortality:
No mortality shall be assumed.
B. Investment Options Other Than Moody's
For Participants with Account Balances in which they have selected an
Investment Option other than the applicable Moody's, the Value of the Accrued
Benefits shall be one hundred ten percent (110%) of the Participant's Account
Balance on the date of calculation.
Page 37
EXHIBIT "D"
TRUST PROPERTY
$----------
Page 38
EXHIBIT "E"
FORM OF CERTIFICATE TO THE TRUSTEE
CERTIFICATE
[Date]
To: [Name and Address of the Trustee]
Ladies and Gentlemen:
1. The undersigned, a duly authorized officer of [Recordkeeper] (in such
capacity the "Recordkeeper"), as Recordkeeper under that certain Albertson's,
Inc. 2000 Deferred Compensation Trust (the "Trust"), dated the ___ day of
______________ , 1999, between Albertson's, Inc., IBJ Whitehall Bank & Trust
Company, as trustee, and Management Compensation Group, Northwest, LLC as
recordkeeper, HEREBY CERTIFIES as follows with respect to Section 4.04(a) of the
Trust.
2. Benefits have become payable under the Albertson's, Inc. 2000 Deferred
Compensation Plan.
3. The name, address and social security number of the recipient of such
benefits are as follows:
Name:
Address:
Social Security Number:
4. The amount and terms of payment of such benefits are as follows:
Amount:
Terms of Payment: [Specify payment dates, number of
payments, and any other relevant information]
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this [ ] day of [ ], [ ].
[Recordkeeper]
By:
-----------------------------------
Name:
Title:
Page 39
EXHIBIT "F"
INDIVIDUALS ELIGIBLE TO BE PARTICIPANTS
[TO BE SUPPLIED]
Page 40
EXHIBIT "G"
FORM OF ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated as of _______________, ____ is entered
into between Albertson's, Inc. ("Assignor"), a Delaware corporation, and IBJ
Whitehall Bank & Trust Company ("Assignee"), the Trustee of the Albertson's,
Inc. 2000 Deferred Compensation Plan Trust (the "Trust").
WHEREAS, pursuant to the trust agreement (the "Trust Agreement"), dated as
of _________________, 1999, among Assignee and IBJ Whitehall Bank & Trust
Company, a New York banking corporation, as Trustee of the Trust, the Assignor
is obligated to assign its ownership interest in any insurance policies held in
the Trust upon the occurrence of a Change in Control or Potential Change in
Control (as defined in the Trust Agreement);
WHEREAS, a determination has been made that a Change in Control or
Potential Change in Control has occurred, effective as of [ ];
WHEREAS, the Assignor has retained ownership of certain insurance policies
held in the Trust, a list of which policies is provided in the attached Exhibit
A (the "Insurance Policies"); and
WHEREAS, Assignor is obligated to assign to Assignee and Assignee is
obligated to accept an assignment of Assignor's ownership in the Insurance
Policies.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Assignment and Assumption. Assignor hereby assigns to Assignee all of
Assignor's rights, options or privileges of ownership under the Insurance
Policies. Assignee hereby accepts such assignment and assumes all of Assignor's
rights, options or privileges of ownership under the Insurance Policies.
2. Obligation for Premiums. Nothing in this Assignment Agreement shall be
interpreted as (i) obligating the Assignee in any way not specifically provided
in the Trust Agreement to pay any Premium Payment Obligation or Additional
Premium Payment Obligation (as defined in the Trust Agreement), or (ii)
modifying in any way the Assignor's sole and continuing obligation to pay any
Premium Payment Obligation or Additional Premium Payment Obligation, as provided
in the Trust Agreement.
3. Successors and Assigns. This Assignment Agreement shall be binding upon,
inure to the benefit of, and be enforceable by, the parties hereto and their
respective successors and assigns.
Page 41
4. Amendment. This Assignment Agreement shall be irrevocable and
may not hereafter be amended in whole or in part by the parties.
ALBERTSON'S, INC.
By:
Its:
IBJ WHITEHALL BANK & TRUST COMPANY
By:
Its:
Page 42