Exhibit 10.3
DEFERRED COMPENSATION PLAN
TRUST AGREEMENT
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TABLE OF CONTENTS
ARTICLE PAGE
ARTICLE 1
Establishment of Trust ................. 1
ARTICLE II
Payments to Plan Participants and their
Beneficiaries ......................... 2
ARTICLE III
Trustee Responsibility Regarding Payments
to Trust Beneficiary when Company is
Insolvent ............................ 3
ARTICLE IV
Duties and Powers of the Trustee........ 4
ARTICLE V
Disposition of Income .................. 6
ARTICLE VI
Limitation of the Trustee's Liability .. 6
ARTICLE VII
Expenses and compensation ............... 7
ARTICLE VIII
Substitution and Succession of the
Trustee ................................ 8
ARTICLE IX
Accounting Provisions ..................... 8
ARTICLE X
Amendment and Termination ................ 9
ARTICLE XI
Successor Company ........................ 9
ARTICLE XII
Construction and Payment .................10
ARTICLE XIII
Miscellaneous ............................ 10
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TRUST AGREEMENT
This Agreement is made by and between New England Business
Service, Inc. (hereinafter the "Company"), and the undersigned
banking institution, as Trustee (hereinafter referred to as the
"Trustee").
W I T N E S S E T H :
WHEREAS, the Company has established the New England
Business Service, Inc. Deferred Compensation Plan (the "Plan")
for certain of its employees; and
WHEREAS, the Company wishes to establish a trust ("Trust")
and to contribute to the Trust assets that shall be held therein,
subject to the claims of the Company's creditors in the event of
the Company's insolvency, as herein defined, until paid to Plan
participants and their beneficiaries in such manner and at such
times as specified in the Plan; and
WHEREAS, it is the intention of the parties that this Trust
shall constitute an unfunded arrangement and shall not affect the
status of the Plan as an unfunded Plan maintained for the purpose
of providing deferred compensation for a select group of
management or highly compensated employees for purposes of Title
1 of the Employee Retirement Income Security Act of 1974; and
WHEREAS, the Trustee has consented to act as trustee of the
trust fund and to hold and distribute the assets transferred to
the trustee and accumulated in respect of the Plan on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual covenants hereinafter set forth, the Company and
the Trustee hereby agree as set forth below.
ARTICLE I
ESTABLISHMENT
1.1 The Trust Fund shall consist of such sums of money
or other property, in a form acceptable to the Trustee, as shall
from time to time be paid or delivered to the Trustee pursuant to
the Plan which, together with all earnings, profits, increments
and accruals thereon, without distinction between principal and
income, shall constitute the Trust Fund hereby created and
established. The Trust Fund shall be held, administered and
disposed of by the Trustee as provided in the Trust Agreement.
The Trust hereby established shall be irrevocable.
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1.2 The Trust is intended to be a grantor trust, of
which the Company is the grantor, within the meaning of subpart
E, part 1, subchapter J, chapter 1, subtitle A of the Internal
Revenue Code of 1986, as amended, and shall be construed
accordingly.
1.3 The Trust Fund shall be held separate and apart
from other funds of the Company and shall be used exclusively for
the uses and purposes of Plan participants and general creditors
as herein set forth. Plan participants and their beneficiaries
shall have no preferred claim on, or any beneficial ownership
interest in, any assets of the Trust. Any rights created under
the Plan and this Trust Agreement shall be mere unsecured
contractual rights of Plan participants and their beneficiaries
against the Company. Any assets held by the Trust will be
subject to the claims of the Company's general creditors under
federal and state law in the event of insolvency, as defined in
Section 3(a) herein.
ARTICLE II
PAYMENTS TO PLAN PARTICIPANTS AND THEIR BENEFICIARIES
2.1 The Company shall designate an Administrative
Committee ("Committee") in accordance with the Plan and the
Committee shall deliver to the Trustee a schedule ("the Payment
Schedule") that indicates the amounts payable in respect of each
Plan participant (and his or her beneficiaries), that provides a
formula or other instructions acceptable to the Trustee for
determining the amounts so payable, the form in which such amount
is to be paid (as provided for or available under the Plan), and
the time of commencement for payment of such amounts. Except as
otherwise provided herein, the Trustee shall make payments to the
Plan participants and their beneficiaries in accordance with such
Payment Schedule. The Trustee shall make provision for the
reporting and withholding of any federal, state or local taxes
that may be required to be withheld with respect to the payment
of benefits pursuant to the terms of the Plan and shall pay
amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld and paid
by the Company. The Company shall provide the Trustee with all
information necessary to make such tax withholding provisions and
the Trustee shall be entitled to rely on such information. The
Company shall be responsible for the remittance to the
appropriate tax authorities of its share of any applicable
employment taxes, as distinguished from those employment taxes
required to be withheld from the benefits due Plan participants
and their beneficiaries.
2.2 The entitlement of a Plan participant or his or
her beneficiaries to benefits under the Plan shall be determined
by the Committee and any claim for such benefits shall be
considered and reviewed by the Committee under the procedures set
out in the Plan.
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2.3 The Company may make payment of benefits directly
to Plan participants or their beneficiaries as they become due
under the terms of the Plan. The Company shall notify the
Trustee of its decision to make payment of benefits directly
prior to the time amounts are payable to participants or their
beneficiaries. In addition, if the principal of the Trust, and
any earnings thereon, are not sufficient to make payments of
benefits in accordance with the terms of the Plan, the Company
shall make the balance of each such payment as it falls due.
Trustee shall notify the Company where principal and earnings are
not sufficient to cover payments required by the Payment Schedule
under paragraph 2.1 hereof.
ARTICLE III
TRUSTEE RESPONSIBILITY REGARDING PAYMENTS TO TRUST BENEFICIARY
WHEN COMPANY IS INSOLVENT
3.1 The Trustee shall cease payment of benefits to
Plan participants and their beneficiaries if the company is
Insolvent. The Company shall be considered "Insolvent" for
purposes of this Trust Agreement if (i) the Company is unable to
pay its debts as they become due, or (ii) the Company is subject
to a pending proceeding as a debtor under the United States
Bankruptcy Code or under state court receivership law.
3.2 At all times during the continuance of the Trust
as provided in paragraph 1.3 hereof, the principal and income of
the Trust shall be subject to claims of general creditors of the
company under federal and state law as set forth below:
3.2.1 The Board of Directors and the Chief Executive
Officer of the Company shall have the duty to inform the Trustee
in writing of the Company's Insolvency. If a person claiming to
be a creditor of the Company alleges in writing to the Trustee
that the Company has become Insolvent, the Trustee shall
determine whether the Company is Insolvent and, pending such
determination, the Trustee shall discontinue payment of benefits
to Plan participants or their beneficiaries.
3.2.2 Unless the Trustee has actual knowledge of the
Company's Insolvency, or has received notice from the Company or
a person claiming to be a creditor alleging that the Company is
Insolvent, the Trustee shall have no duty to inquire whether the
company is Insolvent. The Trustee may in all events rely on such
evidence concerning the Company's solvency as may be furnished to
the Trustee by the Company and that provides the Trustee with a
reasonable basis for making a determination concerning the
Company's solvency. The Trustee may hire accountants at the
expense of the Trust Fund to assist it in making such a
determination concerning the Company's solvency.
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3.2.3 If at any time the Trustee has determined that the
company is Insolvent, the Trustee shall discontinue payments to
Plan participants or their beneficiaries and shall hold assets of
the Trust for the benefit of the Company's general creditors.
While so holding such assets, the Trustee shall make payments to
such creditors if the Company shall so direct or, if the Company
is subject to a pending proceeding as a debtor under the United
States Bankruptcy code or state receivership law, as a court of
competent jurisdiction shall direct. Nothing in this Trust
Agreement shall in any way diminish any rights of Plan
participants or their beneficiaries to pursue their rights as
general creditors of the Company with respect to benefits due
under the Plan or otherwise.
3.2.4 The Trustee shall resume the payment of benefits
to Plan participants or their beneficiaries in accordance with
Article II of this Trust Agreement only after the Trustee has
determined that the Company is not Insolvent (or is no longer
Insolvent).
3.3 Provided that there are sufficient assets, if the
Trustee discontinues the payment of benefits from the Trust
pursuant to paragraph 3.2. hereof and subsequently resumes such
payments, the first payment following such discontinuance shall
include the aggregate amount of all payments due to Plan
participants or their beneficiaries under the terms of the Plan
for the period of such discontinuance, less the aggregate amount
of any payments made to Plan participants or their beneficiaries
by the Company in lieu of the payment provided for hereunder
during any such period of discontinuance.
ARTICLE IV
DUTIES AND POWERS OF THE TRUSTEE
4.1 The Trustee shall act with the care, skill,
prudence and diligence under the circumstance then prevailing
that a prudent person acting in like capacity and familiar with
such matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that the Trustee
shall incur no liability to any person for any action taken
pursuant to a direction, request or approval given by the Company
or the Committee which is contemplated by, and in conformity
with, the terms of the Plan or this Trust and is given in writing
by the Company or the Committee. In the event of a dispute
between the Company and a party, the Trustee may apply to a court
of competent jurisdiction to resolve the dispute.
4.2 The Trustee shall follow the written directions of
the Committee with respect to investing and reinvesting the Trust
Fund. The Company shall be responsible to ensure that such
written directions of the Committee are made in accordance with
the Plan and are not contrary to law. The Trustee shall have no
responsibility to monitor investments of the Trust Fund and shall
not be liable for any investment losses or other consequences
resulting from any action or inaction of the Company or the
Committee with respect to the investments of the Trust Fund.
Subject to said directions, the Trustee shall have the power:
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4.2.1 To purchase or subscribe for and invest in any
securities, but not including any securities of the Trustee or
any affiliate of the Trustee, and to retain any such securities
in the Trust Fund. Without in any way intending to limit the
generality of the foregoing, the said term "securities" shall be
deemed to include common and preferred stocks, mortgages,
debentures, bonds, notes or other evidences of indebtedness, and
other forms of securities. All rights associated with assets of
the Trust shall be exercised by the Trustee, or by the person
designated by the Trustee, and shall in no event be exercisable
by or rest with Plan participants. The Company shall have the
right at any time, and from time to time in its sole discretion,
to substitute assets of equal fair market value for any asset
held by the Trust. This right is exercisable by the Company in a
nonfiduciary capacity without the approval or consent of any
person in a fiduciary capacity. Upon the written direction of
the committee, the Trustee shall invest and reinvest all or a
portion of the Trust Fund in shares of any open-ended investment
fund or company, including those managed by an affiliate of the
Trustee.
4.2.2 To deal with all or any part of the Trust Fund; to
acquire any property by purchase, subscription, lease, or other
means; to sell for cash or on credit, convey, lease for long or
short terms, or convert, redeem, or exchange all or any part of
the Trust Fund; to hold part of the Trust Fund uninvested or in
savings accounts or certificates of deposit offered by the
Trustee, or in money market funds managed by the Trustee or an
affiliate of the Trustee.
4.2.3 To vote, or give proxies to vote, any stock or
other security, and to waive notice of meetings, to oppose,
participate in, and consent to the reorganization, merger,
consolidation, or readjustment of the finances of any enterprise,
to pay assessments and expenses in connection therewith and to
deposit securities under deposit agreements.
4.2.4 To register any investment held in the Trust in
its own name or in the name of its nominee, or to hold any
investment 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.
4.2.5 To make, execute, acknowledge and deliver any and
all documents, deeds and conveyance, and any and all other
instruments necessary or appropriate to carry out the powers
herein granted.
4.2.6 To enforce by suit or otherwise, or to waive, it
right on behalf of the Trust Fund, and to defend claims asserted
against it or the Trust Fund; to compromise, adjust and settle
any and all claims against or in favor of it or the Trust Fund.
4.2.7 To renew, extend, or foreclose any mortgage or
other security; to bid on property in foreclosure; to take deeds
in lieu of foreclosure, with or without paying a consideration
therefor.
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4.2.8 To employ agents necessary for the operation of
the Trust and to request the advice and assistance of counsel,
including counsel for the Company, or other counsel designated by
the Committee or by the Trustee.
4.2.9 In the event that the Company authorized the
transfer of all or a portion of the assets of the Trust to an
insurance company, to enter into and execute on behalf of the
Trust all such documents and instruments necessary or appropriate
to carry out such transfer.
4.2.10 To do all such other acts, execute all such other
instruments and take such other proceedings and exercise all such
other privileges and rights with relation to any asset
constituting a part of the Trust as are necessary to carry out
the purpose of the Trust, and no person dealing with the Trustee
shall be bound to see to the application of any money or property
paid or delivered to the Trustee or to inquire into the validity
or propriety of any such transaction.
4.3 No persons dealing with the Trustee shall be under
any obligation to see to the proper application of any money paid
or property delivered to the Trustee or to inquire into the
Trustee's authority as to any transaction.
4.4 The Trustee may make any distribution required
hereunder by mailing its check for the specified amount, or
delivering the specified property, to the person to whom such
distribution or payment is to be made, at such address as may
have been last furnished to the Trustee, or if no such address
shall have been furnished, to such person in care of the Company,
or to the Committee or (if so directed by the Committee) by
crediting the account of such person or by transferring the funds
to such person's account by bank or wire transfer.
ARTICLE V
DISPOSITION OF INCOME
During the term of this Trust, all income received, net of
expenses and taxes, shall be accumulated and reinvested.
ARTICLE VI
LIMITATION OF TRUSTEE'S LIABILITY
6.1 The Trustee shall be accountable only for funds
actually received by it hereunder and shall have no duty or
liability to determine that the amount of the funds received by
it comply with the provisions of the Plan. If the Company has
established a contract with an insurance company to carry out the
purposes of the Plan, the Trustee shall not be liable for the
acts or omissions of such insurance company, or be under an
obligation to invest or otherwise manage the portion of the Trust
Fund which is subject to the management of such insurance
company.
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6.2 Whenever the Trustee is required or authorized to
take any action hereunder pursuant to any written direction or
notice of the Committee or the Company, the Trustee, acting in
accordance with such direction or notice, shall not be
responsible for the administration of such Plan or Trust, for the
correctness of any payments or disbursements from the Trust, or
for any other action taken by the Trustee in accordance with such
written direction or notice. Such direction or notice shall be
sufficient protection to the Trustee if contained in writing
signed by the Committee or such other person authorized to
execute documents on behalf of the Committee, in the case of
direction or notice required to be given by the Committee; or by
any officer of the Company, in the case of direction or notice
required to be given by the Company.
6.3 The Company shall indemnify and hold harmless the
Trustee from and against any losses, costs, damages or expenses,
including reasonable attorneys' fees, which the Trustee may incur
or pay out by reason of (i) the Trustee's acting in accordance
with the directions of the Company or the Committee or failing to
act in the absence of such directions; (ii) the Trustee's
exercise and performance of its powers and duties hereunder,
unless the same are determined to be due to the Trustee's
negligence, bad faith or willful misconduct; (iii) any (alleged
or actual) action or inaction on the part of the Company or the
Committee, unless such losses, costs, damages, or expenses arise
out of the Trustee's negligence, bad faith, or willful
misconduct; or (iv) the Plan at any time fails to be exempt from
the requirements of Parts 2, 3 and 4 of Title I of the Employee
Retirement Income Security Act of 1974, as amended. In addition,
in the event that the Trustee undertakes or defends any
litigation (including but not limited to any audit, proceeding or
any other administrative action of any state, local or federal
taxing authority) arising in connection with the Trust Fund, the
Company agrees to indemnify the Trustee against the Trustee's
reasonable costs, expenses, and liabilities (including, without
limitation, reasonable attorneys' fees and expenses) relating
thereto and to be primarily liable for such payments. If the
company does not pay such costs, expenses, and liabilities
described in this paragraph in a reasonably timely manner, the
Trustee may obtain payment from the Trust Fund.
ARTICLE VII
EXPENSES AND COMPENSATION
The Trustee shall be paid such reasonable compensation as
shall from time to time be agreed upon by the Trustee and the
Company. All administrative expenses, charges, taxes and
assessments of the Trust Fund and Trustee's fees shall be paid
from the Trust Fund, and if the Trust Fund is insufficient to
cover all such costs, the balance thereof shall be paid by the
Company.
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ARTICLE VIII
SUBSTITUTION AND SUCCESSION OF TRUSTEE
8.1 The Trustee may resign at any time by giving
written notice to the Committee. Such resignation shall become
effective ninety (90) days thereafter or upon the appointment of
a successor Trustee, whichever occurs first. In the event a
successor Trustee is not appointed within ninety (90) days, the
Trustee may turn over the assets of the Trust to the Committee as
successor Trustee. The Committee may remove the Trustee by
giving ninety (90) days written notice to the Trustee of such
intent to remove, and by then giving written notice of the
appointment of a successor Trustee. The removal shall become
effective upon acknowledgment of the receipt of the assets of the
Trust by the successor Trustee. Each successor Trustee under
this Trust shall be appointed in writing by the Committee and
shall accept the Trust in writing. Such successor Trustee shall
become vested with any estate, property, right, power and duty of
the predecessor Trustee hereunder with like effect, as if
originally named Trustee. No successor Trustee shall be liable
for any act or failure of any predecessor Trustee, and with the
approval of the Committee, a successor Trustee may accept the
account rendered and the property delivered to it by the
predecessor Trustee without in so doing incurring any liability
or responsibility with respect to acts of default, if any, of the
predecessor Trustee.
8.2 Any corporation into which the Trustee may merge
or with which it may consolidate, or any corporation resulting
from any merger or consolidation to which the Trustee may be
party, shall be the successor of the Trustee hereunder, without
the execution or filing of any additional instrument of the
performance of any further act.
ARTICLE IX
ACCOUNTING PROVISIONS
9.1 The Trustee shall keep accurate and detailed
records of all investments, receipts, disbursements, and all
other transactions required to be made in the administration of
the Trust Fund.
9.2 Within a reasonable time after the close of each
fiscal year, or of any termination of the duties of the Trustee
hereunder, the Trustee shall prepare and deliver to the Committee
an account of its acts and transactions as Trustee during such
fiscal year or during such period from the close of the last
fiscal year to the termination of the Trustee's duties,
respectively, including a statement of the then current value of
the Trust Fund. Any such account shall be deemed accepted and
approved by the Committee, and the Trustee shall be relieved and
discharged, as if such account had been settled and allowed by a
judgment or decree of a court of competent jurisdiction, unless
protested by written notice to the Trustee within sixty (60) days
of receipt thereof by the Committee.
9.3 The Trustee or the Committee shall have the right
to apply at any time to a court of competent jurisdiction for
judicial settlement of any account of the Trustee not previously
settled as herein provided or for the determination of any
question of construction or for instructions. In any such action
or proceeding it shall be necessary to join as parties only the
Trustee and the Committee (although the Trustee may also join
such other parties as it may deem appropriate), and any judgment
or decree entered therein shall be conclusive.
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ARTICLE X
AMENDMENT AND TERMINATION
10.1 This Trust Agreement may be amended by a written
instrument executed by the Trustee and the Company.
Notwithstanding the foregoing, no such amendment shall conflict
with the terms of the Plan or shall make the Trust revocable.
10.2 The Trust shall not terminate until the date on
which Plan participants and their beneficiaries are no longer
entitled to benefits pursuant to the terms of the Plan. Upon
termination of the Trust, any assets remaining in the Trust shall
be returned to the Company.
ARTICLE XI
SUCCESSOR COMPANY
Unless this Trust be sooner terminated, a successor to the
business of the Company, by whatever form or manner resulting,
which succeeds said Company under the Plan as therein provided
shall, upon notice in writing from the Committee that all action
required by the Plan to effect such succession has been taken,
also succeed to all the right, powers and duties of such Company
hereunder.
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ARTICLE XII
CONSTRUCTION AND PAYMENT
12.1 The Trust shall be construed and administered
according to the laws of the jurisdiction in which the principal
office of the Trustee is located. In any question of
interpretation or other matter of doubt, the Trustee may rely
upon the opinion of counsel for the Company or Committee or any
other attorney at law designated by the Company with approval of
the Trustee.
12.2 No person having any present or future interest in
the Trust shall have any right to assign, transfer, encumber,
commute or anticipate his payment under this Trust and such
payment shall not in any way be subject to any legal process or
levy of execution upon, or attachment or garnishment proceeding
against, the same for the payment of any claim against any person
having an interest hereunder, nor shall such payment be subject
to the jurisdiction of any bankruptcy court or insolvency
proceedings.
ARTICLE XIII
MISCELLANEOUS
13.1 The titles to the Articles in this Trust Agreement
are included for convenience of reference only and are not to be
used in interpreting this Trust Agreement.
13.2 Neither the gender nor the number (singular or
plural) of any word shall be construed to exclude another gender
or number when a different gender or number would be appropriate.
13.3 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 Trust
Agreement.
13.4 Communications to the Trustee shall be sent to the
Trustee's principal office or to such other address as the
Trustee may specify in writing. No communication shall be
binding upon the Trustee until it is received by the Trustee.
Communications to the Committee or the Company shall be sent to
the Company's principal office or to such other address as the
Company may specify in writing.
13.5 The effective date of this Trust Agreement shall
be September 1, 2002.
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IN WITNESS WHEREOF, the Company and the Trustee have caused
this instrument to be executed this 29th day of August, 2002.
Company: New England Business Service, Inc.
By:___/s/ Daniel M. Junius_______
Signature of Officer
Trustee: Investors Bank and Trust Company
By:___[Illegible Signature]_________
Signature of Officer
STATE OF MASSACHUSETTS
COUNTY OF MIDDLESEX
In Groton, MA on the 29th day of August, 2002, before me
personally appeared Daniel M. Junius, to me known and known by me
to be the Executive Vice President of and the person who executed
the foregoing instrument for and on behalf of New England
Business Service, Inc. and he acknowledged said instrument by him
executed to be the free act and deed of Daniel M. Junius and his
own free and voluntary act and deed in his capacity as Executive
Vice President of said Company.
__/s/ Michelle R.Palermo-Murphy
Notary Public