Exhibit No. 10(b)
TRUST AGREEMENT, hereinafter referred to as the "Agreement",
made as of July 1, 1994, by and between Liz Claiborne, Inc.,
hereinafter referred to as the "Company", a corporation, having its
principal place of business in New York, New York, and IDS Trust
Company, hereinafter referred to as the "Trustee", a Minnesota
corporation, having its principal place of business in Minneapolis,
Minnesota.
W I T N E S S E T H:
WHEREAS, the Company has heretofore adopted the Liz Claiborne
Savings Plan, as from time to time in effect (hereinafter referred
to as the "Plan"), which provides for the establishment of a trust
intended to be part of the Plan and to be exempt from tax pursuant
to Section 501(a) of the Code, and into which the Company shall pay
the contributions as provided in the Plan; and
WHEREAS, the Trustee has consented to act as Trustee of such
trust (the "Trust"), effective July 1, 1994.
WHEREAS, the Company has appointed a Committee to direct,
manage and administer the Plan and the Committee has appointed a
Recordkeeper to perform such administrative functions as the
Committee may determine from time to time, including the processing
of contribution elections, distributions, loans, investment elec-
tions and Beneficiary designations under the terms of the Plan; and
NOW, THEREFORE, the Company and the Trustee agree as follows:
Section 1. Establishment of Trust Fund. The Company hereby
establishes with the Trustee, pursuant to the Plan and as a part
thereof, a Trust consisting of such sums of money and such property
acceptable to the Trustee as shall from time to time be paid or
delivered to the Trustee, and the earnings and profits thereon,
less the payments which shall have been made by the Trustee, to the
extent authorized herein. Such assets shall be referred to herein
as the Fund. The Fund shall be held by the Trustee in trust and
dealt with in accordance with the provisions of this Agreement and,
to the extent that the Fund is invested in collective funds
maintained pursuant to the "1993 Amended and Restated Declaration
of Trust - IDS Trust Collective Funds for Employee Benefit Trusts",
as amended from time to time (hereinafter referred to as the
"Declaration of Trust"), the terms of such Declaration of Trust to
the extent not inconsistent herewith. Said Declaration of Trust is
hereby made a part of this Agreement. At no time shall any part of
the corpus or income of the Fund be used for or diverted to
purposes other than for the exclusive benefit of Members of the
Plan and their beneficiaries. Capitalized terms shall have the
meaning prescribed in the Plan unless otherwise defined herein.
Section 2. Duties of Trustee. It shall be the duty of the
Trustee (a) to hold, to invest and to reinvest the Fund as the
Committee may direct (including pursuant to the directions of each
Member, or Beneficiary, provided to the Recordkeeper directly by
such Member, in which case the Member shall be a named fiduciary of
the Plan with respect to the control and management of the portion
of the Fund over which he may exercise such investment discretion),
and (b) to make payments and distributions in cash or in shares of
common stock of the Company from the Fund as the Committee may
direct, including when the Committee, or the Recordkeeper to the
extent authorized by the Committee, shall so direct, payments to
the Members or their beneficiaries under the Plan. Such directions
need not specify the purpose of the payments so directed and the
Trustee shall not be responsible in any way respecting the purpose
of such payments or for the administration of the Plan. The
Trustee shall be under no duty to enforce payment of any contri-
bution and shall not be responsible for the adequacy of the Fund to
meet and discharge any liabilities under the Plan.
Voting of Company Stock. Before each annual or special
meeting of the stockholders of the Company, or in connection with
a tender or exchange offer for common stock of the Company, the
Trustee shall inform the transfer agent of the Company or such
individual or entity as may be selected by the Committee
(hereinafter referred to as the "Transfer Agent") as to which
Members for whose account the Trustee holds shares of stock of Liz
Claiborne, Inc. or any successor thereof by merger, consolidation
or otherwise. The Transfer Agent shall then furnish to each such
Member a copy of the solicitation material in connection with such
meeting or tender or exchange offer, as the case may be, which
material shall include a document which the Member can use to
indicate confidential instructions as to how the stock allocated to
the Member's account is to be voted, in the case of a meeting, or
disposed of, in the case of a transfer or exchange offer. The
Transfer Agent shall tabulate such instructions from the Members of
the Plan and advise the Trustee as to how such shares for which the
Transfer Agent has received instructions should be voted, tendered
or exchanged. The directing Member, and not the Trustee or the
Transfer Agent, shall be the named fiduciary under ERISA in connec-
tion with any such direction provided by the Member. Upon receipt
of such instruction from the Transfer Agent, the Trustee shall vote
or tender or exchange the stock, as the case may be, as instructed.
Shares of common stock of the Company as to which no instructions
from the Member are received by the Transfer Agent shall be voted
by the Trustee in proportion to the instructions received from
Members (as tabulated by the Transfer Agent) for shares credited
to their accounts under the Plan. The Trustee shall not tender or
exchange shares of the Company's common stock in a tender or ex-
change offer for which no instructions are received from the
Transfer Agent. The Trustee shall hold the instructions so
received in strictest confidence and shall not divulge or release
such instructions to any person, including officers or employees of
the Company or any affiliates of the Company.
Section 3. Standards; Prudent Person Rule. The Trustee
shall, in discharging its duties, act solely in the interests of
the Members and Beneficiaries of the Plan. It will act exclusively
for the purpose of providing benefits to Members and Beneficiaries
and for defraying the reasonable expenses of the Plan. The Trustee
shall carry out its duties with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of like character and
with like aims; and by acting in accordance with the provisions of
this Agreement to the extent that the provisions hereof are
consistent with the provisions of ERISA.
Section 4. Investment of Trust Fund. The Committee shall
direct the investment of the Fund assets or shall appoint an
Investment Manager(s) (as defined in Section 3(38) of ERISA) to
direct the investment of all or a portion of the Fund assets.
(a) The Trustee shall, having regard for the cash require-
ments of the Plan as stated to it by the Committee (or the
Recordkeeper to the extent authorized by the Committee) from time
to time, invest and reinvest the principal and income of the Fund
and keep the Fund invested, without distinction between principal
and income, as directed by the Committee or the Investment Manager,
in any and all common shares, preferred shares, common trust funds
of the Trustee, variable notes, bonds, savings accounts, certifi-
cates of deposit, notes, debentures, options, mortgages, equipment
trust certificates, and in such other property, real or personal,
investments and securities of any kind, class or character as the
Committee may deem suitable for the Fund; provided, however, that
unless otherwise directed by the Committee, the Trustee, in
accordance with the Pooled Company Stock Services Agreement for the
Liz Claiborne Company Stock Fund, shall determine the times and
prices at which and the quantities in which all acquisitions and
dispositions of Company stock shall be made and shall select the
brokers and dealers through and from which all such transactions
shall be executed. The Trustee may keep such portion of the Fund
in cash or cash balances as the Committee shall from time to time
specify is necessary to meet the Committee's directions or, to the
extent authorized by the Committee, the Recordkeeper's directions,
of the payments of moneys from the Fund;
(b) The Trustee is specifically authorized and empowered to invest
and reinvest, as directed by the Committee or the Members, all or
any part of the cash and other property held hereunder in such
common or collective or pooled or commingled investment fund
selected by the Committee (or the Member) established by IDS Trust
Company under the Declaration of Trust or in mutual funds
established by IDS Trust Company or its affiliates (provided such
transaction does not constitute a prohibited transaction under
ERISA for which no exemption exists).
Section 5. Powers of the Trustee. (a) In addition to all
other powers and authorities elsewhere in this Agreement
specifically granted to the Trustee, the Trustee shall have the
following powers and authority, to be exercised in its sole
discretion:
(i)To keep any or all securities or other property in the name
of a nominee with or without power of attorney for a transfer
or in its own name without disclosing its fiduciary capacity,
or in bearer or book entry form; provided, however, that the
books and records of the Trustee shall at all times show that
all such investments are part of the Fund;
(ii) To make, execute, acknowledge and deliver any and all
instruments deemed necessary or appropriate to carry out the
powers herein granted;
(iii) To employ suitable agents, including, but not limited
to, auditors, actuaries, accountants, and legal and other
counsel, and to pay, with the consent of the Committee, their
reasonable expenses and reasonable compensation for services
to the Trust from the Fund; and
(iv) To settle securities trades through a securities
depository that utilizes an institutional delivery system, in
which event the Trustee may deliver or receive securities in
accordance with appropriate trade reports or statements given
to the Trustee by such depository.
(b) The Trustee shall exercise the following powers upon the
direction of the Committee or an Investment Manager designated by
the Committee:
(i) To invest and reinvest Fund assets in common stocks, preferred
stocks, bonds, notes, debentures, mortgages, insurance policies,
commercial paper, individual or group annuity contracts, fixed
income contracts, fixed time deposits, money market instruments,
mutual funds, collective investment funds, pooled investment funds,
common investment funds, commingled investment funds or other in-
vestments including investments offered by the Trustee or its
affiliates;
(ii) To invest and reinvest in stocks and other securities
issued by the Company or any subsidiary or affiliate thereof;
provided that any such investment shall conform with the
requirements of ERISA;
(iii) To exercise any or all conversion and subscription
rights with respect to properties held in the Fund;
(iv) To hold cash uninvested and unproductive of income or
deposit same with any banking or savings institution, including its
own banking department or the banking department of an affiliate;
(v)To invest Fund assets in loans to Members of the Plan, as
directed by the Committee or the Recordkeeper to the extent
authorized by the Committee;
(vi) To compromise, accept or otherwise settle any claim by
or against the Fund or disputed liabilities due to or from the
Trustee with respect to the Fund, including any claim that may be
asserted for taxes under present or future laws, or to enforce or
contest the same by appropriate legal proceedings; and
(vii) To deliver or cause to be executed and delivered, to the
Committee or the designated Investment Manager, all notices,
prospectuses, finance statements, proxies and proxy soliciting
materials relating to investments held hereunder. Except for those
Fund assets for which IDS Trust Company is the Investment Manager
and for common stock of the Company pursuant to Section 2, the
Trustee shall vote any proxy or tender offer election, participate
in any voting trust, exercise any options or subscription right or
join in, dissent from or oppose any merger, reorganization,
consolidation, liquidation or sale with respect to any asset held
hereunder only in accordance with the timely written instructions
of the Committee. If no such written instructions are received,
such proxies, elections and voting trust votes shall not be voted;
such options or subscription rights shall not be exercised; and
such mergers, reorganizations, consolidations, liquidations or
sales shall not be joined, dissented from or opposed.
The Company may assign to the Members the right to vote proxies or
exercise other rights of ownership with respect to any asset held
hereunder. To the extent the right to vote or other incidents of
ownership are vested in whole or in part in the Members, the
Trustee shall act in this regard only in accordance with the timely
written instructions received from the Members. For this purpose,
each Member shall act as the Named Fiduciary, as defined in ERISA,
in providing direction to the Trustee.
(c)Upon the direction of the Committee, the Trustee shall
exercise the power to borrow money for purposes of this Trust upon
such terms and conditions as appropriate, and to obligate the Fund
for repayment.
Section 6. Prohibited Transactions. Except as provided in
Section 408 of ERISA, the Trustee shall not cause the Plan and the
Trust to engage in a transaction if it knows that such a
transaction is a "prohibited transaction" under Section 406 of
ERISA for which there is no exemption.
Section 7. Trustee Compensation, Taxes and Expenses. All
brokerage costs and transfer taxes incurred in connection with the
investment and reinvestment of the Fund, all reasonable expenses
(other than fees for legal services rendered to the Trustee)
incurred in connection with the acquisition or holding of real or
personal property, any interest therein or mortgage thereon, and
all income taxes or other taxes of any kind whatsoever which may be
levied or assessed under existing or future laws upon or in respect
of the Fund, shall be paid from the Fund, and, until paid, shall
constitute a charge upon the Fund. All other reasonable admin-
istration expenses incurred by the Trustee in the performance of
its duties including reasonable fees for legal services rendered to
the Trustee, such compensation to the Trustee as may be agreed upon
from time to time between the Company and the Trustee and evidenced
by a writing signed by an officer of the Company, and all other
proper charges and disbursements of the Trustee shall be paid by
the Fund unless paid by the Company.
Section 8. Accounting. (a) The Trustee shall keep accu-
rate and detailed accounts of all investments, receipts and
disbursements, and all such accounts and books and records relating
thereto shall be open to inspection and audit at all reasonable
times by any person designated by the Committee. Within a
reasonable time following the close of a Plan Year, and within a
reasonable time following the resignation or removal of the Trustee
as provided for in Section 11, and within a reasonable time
following the completion of the application or distribution of the
Fund upon termination of the Plan as provided in Section 12 of this
Agreement, the Trustee shall file with the Committee a written
account setting forth all investments, receipts and disbursements
effected by it during such year or during the period from the
closing date of such resignation or removal to the date of such
completion of application or distribution of funds and certified as
to the accuracy of the information set forth therein. Each such
account shall set forth in summary form the receipts and dis-
bursements of the Trustee for the period accounted for and shall
include a description of all securities and property purchased and
sold during the period accounted for and the cost or proceeds of
sale thereof, and shall show all cash, securities and other
property held at the end of such period, and the cost and then
market value of each item thereof. Each account shall be open to
inspection during business hours by the Company or the Committee,
or any person designated by the Company or Committee, for a
reasonable period of time following the date on which the account
is filed with the Company or the Committee. The written approval
by the Company or the Committee of any account filed by the Trustee
with the Company or the Committee shall forever release and
discharge the Trustee from any liability or accountability to
anyone as respects the propriety of its acts or transactions shown
in such account, with the exception of acts or transactions as to
which the Company or Committee shall have filed written objections
with the Trustee or of liabilities provided by ERISA or by provi-
sion of other applicable law.
(b)The Trustee shall submit to the Committee monthly a
statement of cash receipts and disbursements and a list of the
assets held in the Fund. The Committee and the Company shall
fulfill any reporting and disclosure obligations related to the
Fund which are imposed on the Committee and the Company by ERISA or
by any other similar state or federal law.
(c)Nothing herein contained shall be construed as depriving
the Trustee of the right to have a judicial settlement of its
accounts. Upon any proceedings by the Trustee for a judicial
settlement of its accounts or for instructions, the only necessary
parties hereto in addition to the Trustee shall be the Company and
the Committee. None of the Members and other beneficiaries
referred to in the Plan, or the Recordkeeper shall have any right
to compel accounting, judicial or otherwise, by the Trustee.
Section 9. Bonding. The Trustee and each member of the
Committee and every person who handles funds or other property of
the Plan shall be bonded in the manner and to the extent required
by the provisions of Section 412 of ERISA.
Section 10. Reliance by Trustee. (a) All requests,
directions, requisitions for moneys, certifications and
instructions by the Committee, or the Recordkeeper to the extent
authorized by the Committee, to the Trustee, subject to the
provisions of the Plan and this Agreement, shall be in writing and
shall be signed by a member of such Committee, or by such person
appointed by the Committee, as may be designated from time to time
by such Committee, or by the Recordkeeper, and the Trustee shall
act and shall be fully protected in acting in accordance with such
requests, directions, requisitions, certifications and instruc-
tions. The Company shall promptly furnish to the Trustee from time
to time certificates of an officer of the Company evidencing the
appointment and termination of office of the members of the
Committee and the Committee shall likewise furnish certificates
evidencing designation of any other person or persons authorized to
act on behalf of the Committee, together with specimens of their
signatures, and for all purposes hereunder the Trustee shall be
conclusively entitled to rely upon the identity and authority of
the Chairman and Secretary and members constituting the Committee
and of such other person or persons as disclosed by the most
current of such certificates received by the Trustee.
(b)It shall be the duty of the Trustee to act strictly in
accordance with the directions of the Committee and the directions
of the Recordkeeper to the extent authorized by the Committee, as
provided in the Plan and in this Agreement. The Trustee shall be
under no duty to question any direction of the Committee to the
extent permitted by law. The Trustee shall not be liable for any
loss of any kind which may result by reason of any action taken by
the Trustee in accordance with any direction of the Committee or
any direction of the Recordkeeper authorized by the Committee or by
reason of the Trustee's failure to exercise any of such powers
because of the failure of the Committee to give the required direc-
tion. The responsibility and liability of the Trustee for all
actions taken in good faith and in accordance with the provisions
hereunder shall be governed solely by the terms of this Agreement,
and no implied covenant or obligation shall be read into this
Agreement against the Trustee.
(c)If a dispute arises as to who is entitled to or should
receive any distribution from the Fund, the Trustee may withhold,
or cause the withholding of, such distribution until the dispute
has been resolved. In the event that any distribution ordered by
the Committee or the Recordkeeper shall be mailed by the Trustee by
registered mail, directed to the person specified in such order at
the latest address of such person filed with the Committee or the
Recordkeeper, and shall be returned to the Trustee because such
person cannot be located at such address, the Trustee shall
promptly notify the Committee of such return. Upon the expiration
of sixty (60) days after such notification such order shall become
void, and unless and until a further order of the Committee is
received by the Trustee with respect to such distribution, the
Trust shall thereafter continue to administer the Fund as if such
order had not been made by the Committee.
Section 11. Resignation or Removal. The Trustee may be
removed by the Board of Directors of the Company at any time upon
60 days' notice in writing to the Trustee (or such shorter period
of notice as the Trustee and the Company shall agree to in
writing). The Trustee may resign at any time upon 60 days' notice
in writing to the Company (or such shorter period of notice as the
Trustee and the Company shall agree to in writing). In the event
of such removal or resignation of the Trustee, the Committee shall
designate one or more successor trustees to act hereunder on and
after the effective date of such removal or resignation. Such
successor trustee or trustees, as the case may be, shall have the
same powers and duties as those herein conferred upon the Trustee.
Upon acceptance of such appointment by the successor trustee, the
Trustee shall assign, transfer and pay over to such successor
trustee the fund and properties then constituting the Fund.
Section 12. Amendment and Termination. The Company reserves
the right, at any time and from time to time, by instrument in
writing executed pursuant to authorization by its Board of
Directors, or by the Committee pursuant to section 13.3 of the
Plan, (a) to modify or amend in whole or in part any or all of the
provisions of the Plan or the Trust herein created or (b) to
terminate the Plan or the Trust herein created; provided, however,
that (1) no modification or amendment which affects the rights,
duties or responsibilities of the Trustee may be made without the
Trustee's consent; (2) that no termination, modification, or
amendment may permit, at any time, any part of the Fund to be used
for or diverted to purposes other than for the benefit of the
Members and other Beneficiaries referred to in the Plan; and (3)
that no reduction in credits to a Member may occur as a result of
such termination, modification or amendment. In the event of
termination of the Plan, the Trustee shall, subject to the
foregoing, apply or distribute the Fund in accordance with the
instructions of the Company, provided such instructions are in
accordance with the provisions of ERISA. If within a reasonable
time after receipt of notice of such termination the Trustee shall
not have received written instructions from the Company with
respect to such application or distribution of the Fund, the
Trustee may, in its discretion, (A) proceed to apply or distribute
such Fund in accordance with the Plan; or (B) seek instructions
from a court of competent jurisdiction.
Section 13. Segregation of Fund at Company's Discretion.
The Committee may at any time direct the Trustee to segregate and
set apart a portion of the Fund as a separate trust fund for the
exclusive benefit of any Member or group of Members and their
Beneficiaries to be held under a separate agreement of trust
substantially identical with this Agreement. In such event the
selection of the particular assets so to be segregated shall be
made by the Committee and the Trustee shall segregate such assets
in accordance with the written order of the Committee.
Section 14. Alienation of Benefits. Except as may be other-
wise required by law, no benefit, distribution or payment under the
Plan may be anticipated, assigned (either at law or in equity) or
subject to attachment, garnishment, levy, execution or other legal
or equitable process.
Section 15. Succession. Subject to Section 22, the Plan and
the Trust herein created shall be binding upon, and the powers
herein granted to the Company and the Trustee, respectively, shall
be exercisable by the respective successors and assigns of the
Company and the Trustee.
Section 16. Acceptance of Trust. The Trustee hereby accepts
this Trust and agrees to hold all the cash, securities and other
properties now or hereafter constituting the Fund hereunder subject
to all the terms and conditions of this Agreement.
Section 17. Indemnification for Following Direction. The
Company will indemnify and hold harmless the Trustee from all loss
or liability (including reasonable expenses and reasonable
attorneys' fees) to which the Trustee is subject by reason of any
acts taken in good faith in accordance with proper directions or
instructions from the Company or Committee, or acts omitted in good
faith due to absence of directions from the Company or Committee,
unless such loss or liability is due to the Trustee's negligence or
willful misconduct. The Trustee is entitled to collect on the
indemnity provided by this Section 17 only from the Company, and is
not entitled to any direct or indirect indemnity payment from
assets of the Fund. This Section 17 shall survive the termination
of this Trust until such time as the final account of the Trustee
shall have been approved in accordance with Section 8(a).
Section 18. Limitation of Liability of Trustee.
(a)The Company hereby agrees to hold the Trustee harmless from
and against all taxes, reasonable expenses (including reasonable
counsel fees), liabilities, claims, damages, actions, suits or
other charges incurred by the Trustee as a result of any act or
omission of a predecessor trustee.
(b)The Trustee is not responsible for determining the adequacy
of the Fund to meet liabilities under the Plan, and is not liable
for any obligations of the Plan or the Fund in excess of the assets
of the Fund.
Section 19. Undertaking for Costs. The Trustee shall not be
required to expend or risk its own funds or otherwise incur
financial liability in the performance of its duties hereunder, or
in the exercises of any of its rights or powers as Trustee. In the
event that the Trustee must commence or defend any action,
administrative, judicial or otherwise on behalf of the Plan or
Trust, the Trustee may retain professionals including legal or
financial advisors to represent the Trustee in its capacity as
professionals including legal or financial advisors to represent
the Trustee in its capacity as Trustee hereunder. In the event the
Company does not pay for the reasonable costs to retain such
professionals within ninety (90) days after becoming due, such
reasonable costs may be withdrawn from the Fund.
Section 20. Necessary Parties to Legal Actions. Except as
required by Section 502(h) of ERISA, only the Company, the
Committee and the Trustee will be considered necessary parties in
a legal action or proceeding with respect to the Fund, and no
Member, Beneficiary or other person having an interest in the Fund
will be entitled to notice. Any judgment entered on any such
action or proceeding will be binding on all persons claiming under
the Fund. Nothing in this Section is intended to preclude a Member
or Beneficiary from enforcing his legal rights.
Section 21. Receipt of Contributions. The Trustee shall
receive and hold as part of the Fund such assets of the Plan as may
be transferred to it from time to time and any contributions to the
Plan made to the Fund from time to time. The Trustee shall not be
required to determine that any contributions are in compliance with
the Plan and shall be accountable only for the funds actually
received by it. In the case of assets transferred from another
trustee, the Trustee shall not be responsible for any actions or
inaction of such trustee.
Section 22. Assignment by Trustee. No assignment (as
defined in the Investment Advisors Act of 1940) of this Trust shall
be made by the Trustee without the written consent of the Board of
Directors of the Company; provided, however, that the Trustee may
assign this Trust to the parent company of the Trustee or to a
wholly-owned subsidiary of such parent company if such company is
organized and chartered as a trust company and if the Trustee first
gives the Company forty-five (45) days advance notice of such
assignment and the Company does not object in writing within such
forty-five day period.
Section 23. Governing Law. This Agreement will be construed
and governed in all respects in accordance with applicable federal
law, and, to the extent not preempted by such federal law, in
accordance with the laws of the State of Minnesota.
Section 24. Headings. The headings of Sections in this
Agreement are included solely for convenience of reference, and if
there be any conflict between such headings and the text hereof,
the text shall control.
Section 25. Counterparts. This Agreement may be executed in
one or more counterparts, all of which taken together shall be
deemed one original.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized and their corporate seals to be hereunto affixed
and attested as of the day and year first above-written.
Liz Claiborne, Inc.
ATTEST:
BY: Jerome A. Chazen
Roberta S. Karp
IDS Trust Company
ATTEST:
BY:Darryl G. Horsman
Cheri J. Capistrant